QUESTION 9 "Firm UVW has a face debt value of $200 Million USDs trading at...
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Finance
QUESTION 9
"Firm UVW has a face debt value of $200 Million USDs trading at 95% with a pre-tax weighted cost of 8%. Firm UVW's common equity for the year was valued at $100 Million of USDs and preferred equity for $25 Million of USDs. The Preferred equity rate was calculated to be 20%. However, the common equity was to be calculated using CAPM approach, with a 1.5% risk free rate and a 19% market risk premium rate, assuming a Beta of 1.1. If the tax rate is 28%, what is Firm UVW s WACC? Express your answers in strictly numerical terms. For example, if the answer is 5%, write 0.05"
10 points
QUESTION 10
"You founded your firm with a contribution of $1700000, receiving 2000000 shares of stock. Since then, you sold 6000000 stocks to Angel Investors. Now you are considering raising more capital from a Venture Capitalist. They will invest $20000000 and would receive 7000000 newly issued shares. What is the post-money valuation? Express the terms of your answer completely and in strictly numerical terms. For example: If your answer is one million dollars, write: 1000000."
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