Capital structure and valuation the value of this firm is


1. Capital Structure and Valuation. The value of this firm is defined as:

the present value of FCF discounted at the WACC

the present value of FCF discounted at the unlevered cost of equity

the present value of tax shield discounted at the WACC

None of the above

2. Cost of Capital. Note the following additional data: D0 = $1, ROE = 24%, P0 = $15, beta = 1.50, equity ratio = 60%. Calculate the firm's cost of common equity.

14.04%

15.07%

22.74%

None of the above

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Financial Management: Capital structure and valuation the value of this firm is
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