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Unformatted text preview: Debt / Enterprise Value 32.89% Equity / Enterprise Value 67.11% Step 2: Estimate the costs of Financing Debt (after taxes) 4.80% Equity 10.76% Levered equity beta 1.07 Balance Sheet (Book Values) Invested Capital (Market Values) Longterm debt (8.5% interest paid semiannually, due in 2015) Common stock ($1 par value per share) Enterprise Value = Market Capitalization + Debt Step 3: Calculate the WACC WACC 8.80% Capital Structure Weight Source of Capital (Proportion) AfterTax Cost Debt 32.89% 4.80% Equity 67.11% 10.76% WACC Solution Legend = Value given in problem = Formula/Calculation/Analysis required = Qualitative analysis or Short answer required = Goal Seek or Solver cell = Crystal Ball Input = Crystal Ball Output Weighted AfterTax Cost 0.01579 0.07221 8.80%...
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This note was uploaded on 07/24/2009 for the course FIN FIN taught by Professor Robbani during the Summer '09 term at University of Maryland Baltimore.
 Summer '09
 Robbani
 Debt, Interest

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