PT XYZ is a garment company that produces batik and other traditional clothing. The company's financial data is as follows. Earnings before interest and taxes or EBIT = Rp150.000.000 Corporate tax rate or TC = 25% Amount of debt or D = Rp600.000.000 Unlevered cost of capital or RU = 20% The cost of debt or RD = 8% Based on these financial data, determine: c. The value of company WACC d. Provide your analysis of the debt taken by the company whether it brings an advantage or not!
PT XYZ is a garment company that produces batik and other traditional clothing. The company's financial data is as follows. Earnings before interest and taxes or EBIT = Rp150.000.000 Corporate tax rate or TC = 25% Amount of debt or D = Rp600.000.000 Unlevered cost of capital or RU = 20% The cost of debt or RD = 8% Based on these financial data, determine: c. The value of company WACC d. Provide your analysis of the debt taken by the company whether it brings an advantage or not!
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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PT XYZ is a garment company that produces batik and other traditional clothing. The company's financial data is as follows.
Earnings before interest and taxes or EBIT = Rp150.000.000 Corporate tax rate or TC = 25%
Amount of debt or D = Rp600.000.000 Unlevered cost of capital or RU = 20% The cost of debt or RD = 8%
Based on these financial data, determine:
c. The value of company WACC
d. Provide your analysis of the debt taken by the company whether it brings an advantage or not!
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