question archive Given that artetea Alcatel-Lucent has an equity cost of capital of 10
Given that artetea Alcatel-Lucent has an equity cost of capital of 10
Subject:AccountingPrice: Bought3
Given that artetea Alcatel-Lucent has an equity cost of capital of
10.7 %,market capitalization of$ 10.50 billion, and an enterprise value of $15
billion. Suppose Alcatel-Lucent's debt cost of capital is 7.2 % and its marginal tax rate is 34 %
a. What is Alcatel-Lucent's WACC?
b. If Alcatel-Lucent maintains a constant debt-equity ratio, what is the value of a project with average risk and the expected free cash flows as shown here,
Year 0 1 2 3
FCF ($ million) -100 52 104 72
c. If Alcatel-Lucent maintains its debt-equity ratio, what is the debt capacity of the project in part (b)?
Alcatel-Lucent has an equity cost of capital of 10.7 %,market capitalization of$ 10.50 billion, and an enterprise value of $15
billion. Suppose Alcatel-Lucent's debt cost of capital is 7.2 % and its marginal tax rate is 34 %
a. What is Alcatel-Lucent's WACC?
b. If Alcatel-Lucent maintains a constant debt-equity ratio, what is the value of a project with average risk and the expected free cash flows as shown here,
Year 0 1 2 3
FCF ($ million) -100 52 104 72
c. If Alcatel-Lucent maintains its debt-equity ratio, what is the debt capacity of the project in part (b)?
Alcatel-Lucent has an equity cost of capital of 10.7 %,market capitalization of$ 10.50 billion, and an enterprise value of $15
billion. Suppose Alcatel-Lucent's debt cost of capital is 7.2 % and its marginal tax rate is 34 %
a. What is Alcatel-Lucent's WACC?
b. If Alcatel-Lucent maintains a constant debt-equity ratio, what is the value of a project with average risk and the expected free cash flows as shown here,
Year 0 1 2 3
FCF ($ million) -100 52 104 72
c. If Alcatel-Lucent maintains its debt-equity ratio, what is the debt capacity of the project in part (b)?
