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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Firm and Equity Valuation Through Required Returns
The weighted average cost of capital of ABC Corp based on market values is 15.6% while its cost of ordinary shares is 21.0%. It has a long-term debt to equity ratio of 150%. The expected total dividends for the year is P3,400,000 and the growth rate of the share value is 4%.
Compute for the:
1.Equity value
2. Firm value
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