OcuPal is a firm that has two divisions: One division (Palantir) sells SaaS (software as a service) products and the other division (Anduril) sells hardware to government clients. You have decided...


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OcuPal is a firm that has two divisions: One division (Palantir) sells SaaS (software as a service) products and the other division (Anduril) sells hardware to government clients. You have decided<br>that Raytheon is a firm that is very similar to OcuPal's hardware division in terms of both risk exposure and capital structure.<br>You have found the following information about Raytheon online:<br>Raytheon's beta is 0.80, the risk-free rate is 4.40%, its market value of equity is $20.1 billion, and it has $923.7 million worth of debt that currently trades with a YTM of 5.60%. The corporate<br>tax rate is 35.0% and the market risk premium is 9.60%.<br>A) Given the above information, what is the WACC of OcuPal's hardware division (Anduril)?<br>%<br>(Round this answer to 2 decimal places, but use the unrounded answer if any subsequent calculations that require it)<br>B) If OcuPal's overall company WACC is 13.80% and the Anduril division represents 75.00% of the firm's total value, then what should be the WACC for the Palantir Saas division?<br>%<br>(Round your answer to 2 decimal places)<br>Check<br>

Extracted text: OcuPal is a firm that has two divisions: One division (Palantir) sells SaaS (software as a service) products and the other division (Anduril) sells hardware to government clients. You have decided that Raytheon is a firm that is very similar to OcuPal's hardware division in terms of both risk exposure and capital structure. You have found the following information about Raytheon online: Raytheon's beta is 0.80, the risk-free rate is 4.40%, its market value of equity is $20.1 billion, and it has $923.7 million worth of debt that currently trades with a YTM of 5.60%. The corporate tax rate is 35.0% and the market risk premium is 9.60%. A) Given the above information, what is the WACC of OcuPal's hardware division (Anduril)? % (Round this answer to 2 decimal places, but use the unrounded answer if any subsequent calculations that require it) B) If OcuPal's overall company WACC is 13.80% and the Anduril division represents 75.00% of the firm's total value, then what should be the WACC for the Palantir Saas division? % (Round your answer to 2 decimal places) Check

Jun 04, 2022
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