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Suppose Alcatel-Lucent has an equity cost of capital of 9.4%, market capitalization of $9.36 billion,...

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Suppose Alcatel-Lucent has an equity cost of capital of 9.4%, market capitalization of $9.36 billion, and an enterprise value of $13 billion. Suppose Alcatel-Lucent's debt cost of capital is 6.2% and its marginal tax rate is 35%. 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, ? c. If Alcatel-Lucent maintains its debt-equity ratio, what is the debt capacity of the project in part (b)? (Click on the following icon in order to copy its contents into a spreadsheet.) c. It Aicatel-Lucent maintains its aed--equity rato, wnat is the dedt capacity or the project in part (D)? The debt capacity of the project in part (b) is as follows: (Round to two decimal places.) Alcatel-Lucent's WACC is 7.90%. (Round to two decimal places.) b. If Alcatel-Lucent maintains a constant debt-equity ratio, what is the value of a p free cash flows as shown here, ? The NPV of the project is $86.50 million. (Round to two decimal places.)

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