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15-9 Present situation (50% debt): WACC = wd rd(1-T) + wcers = (0.5)(10%)(1-0.15) + (0.5)(14%) = 11.25% V = FCF/WACC = [(EBIT)(1-T)]/WACC = [($13.24)(1-0.15)]/11.25% = $100.04 billion 30 percent debt: WACC = wd rd(1-T) + wcers = (0.3)(8%)(1-0.15) + (0.7)(13%) = 11.14%. V = FCF/WACC = [(EBIT)(1-T)]/WACC = [($13.24)(1-0.15)]/11.14% = $101.023 Million 70 percent debt: WACC = wd rd(1-T) + wcers = (0.7)(12%)(1-0.15) + (0.3)(16%) = 11.94%. V = FCF/WACC = [(EBIT)(1-T)]/WACC = [($13.24)(1-0.15)]/11.94% = $94.255 Million 15-10 a) bu = bL/ (1 + (1 T) (D/S)) = 1.0/ (1 + (1 - .40) (20/80)) = 1.0/1.15 = .870 b) bL= bu (1 + (1 T) (D/S)) (30% debt): bL = .870*(1 + 0.6*(40%/60%)) = 1.218. rs = 6 + 4*(1.218) = 10.872% c) WACC = wdrd(1 T) + Wers = .40*(9%) * (1 - .40) + .60*(10.872%) .056232 = 8.

683% V = FCF/WACC = (EBIT)(1 T)/WACC = (14.933)(1-.4)/.0863 = $103.822 Million 26-8 a) VU = $500,00/(rsU g) = $500,000/(0.13 - 0.09) = $12,500,000 b) VL = $12,500,000 + [(0.07 * 0.40 * $5 Million)]/(0.13-0.09) = $16,000,000 D = 5 S = 16,000,000 5,000,000 = $11,000,000 rsL = 0.13 + (0.13-0.07) * (5,000,000/11,000,000) = 15.7% c) VL = VU + TD = $12,500,000 + (0.4)($5,000,000) = $14,500,000 S = $14,500,000 5,000,000 = $9,500,000. rsL = 0.13+(0.13-0.07)(1-.4)(5,000,000/9,500,000) = 14.89% d)If you privation to stick around a full essay, order it on our website: BestEssayCheap.com
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