5-6sol - PROBLEM 5-6 a. First Solve for EBIT that is...

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PROBLEM 5-6 Initial cost $100,000,000.00 Solutio PFCF (1-30 yrs) $8,000,000.00 = Value given in prob Book debt $80,000,000.00 = Formula/Calculatio = Qualitative analysis Assume capex = depreciation = Goal Seek or Solve Assume perpetual cash flows = Crystal Ball Input 35.00% tax rate = Crystal Ball Output 7.00% Interest rate on debt 9.94% cost of equity EBIT $12,307,692.31 Interest $5,600,000.00 EBT $6,707,692.31 Tax (35%) $2,347,692.31 NI $4,360,000.00 EFCF $4,360,000.00 EBIT $12,307,692.31 Tax on EBIT $4,307,692.31 NOPAT $8,000,000.00 PFCF $8,000,000.00 Diff $0.00 b. AFTER 30 iterations the imputed value of equity converges to the trial value of the equity Book debt WACC 1 $80,000,000.00 $20,000,000.00 5.63% $142,146,410.80 2 $80,000,000.00 $62,146,410.80 6.91% $115,832,776.85 3 $80,000,000.00 $35,832,776.85 6.22% $128,671,310.38 4 $80,000,000.00 $48,671,310.38 6.59% $121,417,692.21 5 $80,000,000.00 $41,417,692.21 6.39% $125,222,602.82 6 $80,000,000.00 $45,222,602.82 6.50% $123,142,620.51 7 $80,000,000.00 $43,142,620.51 6.44% $124,255,068.70 8 $80,000,000.00 $44,255,068.70 6.47% $123,652,974.10 9 $80,000,000.00 $43,652,974.10
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5-6sol - PROBLEM 5-6 a. First Solve for EBIT that is...

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