Unformatted text preview: e end of year 5.
KKR will supply $30 of the $80 required for the acquisition, while the remaining $50 will be raised by issuing different types of debt.
Debt will be repaid in $10 installments in each of the first five years.
8 More Details About PJ Its tax rate is 40% Its cost of debt is 10% per year Its unlevered cost of equity is 20% Its current and perpetual (book) debt outstanding is $21
Its current and perpetual (book) equity outstanding is $63
9 APV Valuation Allequity value = $15/.2 = $75
PV of tax shields from perpetual debt = .4x$21 = $8.40 FOR...
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- Spring '13
- Prime number, APV, target capital structure