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Here is Establishment Industriesâ market value balance sheet Figures in millions Net working capital 700 Debt 1050 Long term assets 2500 Equity 2150 Value of firm 3200 3200 Here is

Here is Establishment Industries’ market-value balance sheet (Figures in millions): Net working capital $ 700 Debt $ 1,050 Long-term assets 2,500 Equity 2,150 Value of firm $ 3,200 $ 3,200 Here is Establishment Industries’ market-value balance sheet (Figures in millions): Net working capital $ 700 Debt $ 1,050 Long-term assets 2,500 Equity 2,150 Value of firm $ 3,200 The debt is yielding 6.5%, and the cost of equity is 14.5%. The tax rate is 31%. Investors expect this level of debt to be permanent. What is Establishment’s WACC? How would the market-value balance sheet change if Establishment retired all its debt? Net working capital $ Debt $ Long-term assets $ Equity $ Value of firm $ Total $

 

Aug 25 2020 View more View Less

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