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Unformatted text preview: $7,000, its tax rate is 36%, its debt beta is 0.3725, and its equity beta is 1.80. (Note: The expected return on any asset i can be measured using the CAPM, ] R [R R R F M F i-+ = , where R M R F is the market premium .) A. Complete the following table entries (Excel is available on the course web page). FINC 727: Corporate transactions and business valuation Professor Robert Hansen 2 End of year 1 2 3 4 annual cash flows EBIT $400.00 $400.00 $400.00 $400.00 interest EBT Taxes NI Dep CAPEX Change in WC Avail cash flow Equity cash flow annual debt schedule Beginning debt Principal payments Debt terminal value estimates Firm Value Debt Equity annual discounting Debt/capital Equity/capital Asset beta All equity WACC Debt beta Equity beta Cost of equity Cost of debt WACC-cost of capital...
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