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    WACC Calculation Comparable Companies Unlevered Beta Capital Structure

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    Ikram
    This document contains a WACC calculation for a company with 30% debt and 70% equity. It provides the levered beta of 1.43 and cost of equity of 12.54%. The cost of debt is 6% but after-tax is 4.35%. The overall WACC is calculated to be 10.08%. Additionally, it evaluates the total firm value, equity value, value per share, and suggests holding the share since the market price is less than the calculated value per share.

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    WACC Calculation Comparable Companies Unlevered Beta Capital Structure

    Uploaded by

    Ikram
    17 views1 page
    This document contains a WACC calculation for a company with 30% debt and 70% equity. It provides the levered beta of 1.43 and cost of equity of 12.54%. The cost of debt is 6% but after-tax is 4.35%. The overall WACC is calculated to be 10.08%. Additionally, it evaluates the total firm value, equity value, value per share, and suggests holding the share since the market price is less than the calculated value per share.

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    This document contains a WACC calculation for a company with 30% debt and 70% equity. It provides the levered beta of 1.43 and cost of equity of 12.54%. The cost of debt is 6% but after-tax is 4.35%. The overall WACC is calculated to be 10.08%. Additionally, it evaluates the total firm value, equity value, value per share, and suggests holding the share since the market price is less than the calculated value per share.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    17 views1 page

    WACC Calculation Comparable Companies Unlevered Beta Capital Structure

    Uploaded by

    Ikram
    This document contains a WACC calculation for a company with 30% debt and 70% equity. It provides the levered beta of 1.43 and cost of equity of 12.54%. The cost of debt is 6% but after-tax is 4.35%. The overall WACC is calculated to be 10.08%. Additionally, it evaluates the total firm value, equity value, value per share, and suggests holding the share since the market price is less than the calculated value per share.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 1

    c

    WACC Calculation Comparable Companies Unlevered Beta


    Capital Structure Company Levered Beta Debt Equity Debt/Equity Tax Rate Unlevered Beta
    Debt to Total Capitalization 30.00% ABC 1.1 7.5 1125 0.67% 25% 1.09
    Equity to Total Capitalization 70.00% \
    Debt / Equity 42.86%

    Cost of Equity
    Risk Free Rate 2.50% 0.67% 1.09
    Equity Risk Premium 7.00%
    Levered Beta 1.43
    Cost of Equity 12.54%

    Cost of Debt
    Cost of Debt 6.00%
    Tax Rate 27.5%
    After Tax Cost of Debt 4.35%

    WACC 10.08%

    e
    Total Current Value of firm
    Capitalzation+ Debt-cash & cash equivalent $ 11,000,001

    f
    Equity Value
    Firm Value - Debt $ 3,500,001
    g
    Value per share
    $ 3.50
    h
    Suggestion
    The firm should hold the share as the market price is $2 which is less then current prcie of share of the firm

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