Alpha Corporation has average annual free cashflows to the equity holder and to the firm of P3,000,000 and P3,350,000 respectively. Assuming that the weighted average cost of capital and actual return of on assets is 16.75% while the market return on Alpha's debt is 7%, what is the value of its equity? a. P34,358,974.36 b.P15,000,000.00 c.P17,910,447.76 d.P20,000,000.00
Alpha Corporation has average annual free cashflows to the equity holder and to the firm of P3,000,000 and P3,350,000 respectively. Assuming that the weighted average cost of capital and actual return of on assets is 16.75% while the market return on Alpha's debt is 7%, what is the value of its equity? a. P34,358,974.36 b.P15,000,000.00 c.P17,910,447.76 d.P20,000,000.00
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Alpha Corporation has average annual free cashflows to the equity holder and to the firm
of P3,000,000 and P3,350,000 respectively. Assuming that the weighted average cost of
capital and actual
7%, what is the value of its equity?
a. P34,358,974.36
b.P15,000,000.00
c.P17,910,447.76
d.P20,000,000.00
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