TechnoLink Berhad is currently an unlevered firm with a weighted average cost of capital (WACC) of 25 percent. The earnings before interest and taxes is forecasted to remain at RM80,000.00 annually....


TechnoLink Berhad is currently an unlevered<br>firm with a weighted average cost of capital<br>(WACC) of 25 percent. The earnings before<br>interest and taxes is forecasted to remain at<br>RM80,000.00 annually. The firm wishes to<br>invest in a new project which requires them<br>borrow RM50,000.00 from a local bank that<br>charges 14 percent interest per annum. The<br>current tax rate for the company is 24 percer<br>REQUIRED: Calculate the following:<br>i. value of the firm without debt<br>ii. value of the firm with debt<br>iii. value of equity after market capitalisation<br>iv. cost of equity after market capitalisation<br>V. weighted average cost of capital (WACC)<br>after market capitalisation<br>

Extracted text: TechnoLink Berhad is currently an unlevered firm with a weighted average cost of capital (WACC) of 25 percent. The earnings before interest and taxes is forecasted to remain at RM80,000.00 annually. The firm wishes to invest in a new project which requires them borrow RM50,000.00 from a local bank that charges 14 percent interest per annum. The current tax rate for the company is 24 percer REQUIRED: Calculate the following: i. value of the firm without debt ii. value of the firm with debt iii. value of equity after market capitalisation iv. cost of equity after market capitalisation V. weighted average cost of capital (WACC) after market capitalisation

Jun 07, 2022
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