Answer Happy

Q.I. Telco Income Statement for year ended December 31, 2016 Income Statement Items Payments for property Salaries Cash flow from operations Miscellaneous expense Proceeds from disposition of property business acquisitions (Gross) Payments for plant Investments and business acquisitions (gross) Proceeds from disposition of plant, and equipment Payments for equipment business acquisitions (net) Amount (In Millions of Dollars) 1. 2124 5000 32,000 12000 400 8000 3216 1600 560 1215 6500 Telco paid $6.242 million of interest to debt holders in 2016 and had an effective tax rate of 20 percent. From the above information, compute free cash flow. 2. Telco is financed with one-third debt and two-thirds, equity, and the after-tax required on equity is 3 percent, and on debt is 8 percent. Calculate the WACC for Telco C.