Topic: Capital Budgeting and Valuation with Leverage Is it possible to calculate the unlevered value of a firm using the APV method, without knowing the debt level, assuming the growth rate of the...

Topic: Capital Budgeting and Valuation with Leverage

Is it possible to calculate the unlevered value of a firm using the APV method, without knowing the debt level, assuming the growth rate of the EBIT and the interest coverage ratio are constant? I don't think so because then you cannot find the pre-tax WACC.

Given information:

• EBIT


• FCF


• Cost of debt


• CAPM


• Corporate tax rate


• Tax paid


• Interest paid


• Long-term debt