Could you please provide step by step answers for these questions. The questions are located on pages 131&132.
6.2: BrandCo currently has 50 million shares outstanding. If BrandCo%u2019s shares are trading at $19.16 per share what is the company%u2019s market
capitalization (value of equity)? Assuming the market value of debt equals today%u2019s book value of debt and what percentage is attributable to equity?
Using these weights compute the weighted average cost of capital. Assume the pretax cost of debt is 8 percent the cost of equity is 12 percent and the
marginal tax rate is 25 percent.
6.3: Using free cash flow computed in Question 1 and the weighted average cost of capital computed in Question 2 estimate BrandCo%u2019s enterprise value
using the growing-perpetuity formula. Assume free cash flow grows at 5 percent.
6.5: What are the three components required to calculate economic profit? Determine BrandCo%u2019s economic profit in year 1.