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Calculate the current value of the firm equity

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DG Khan cement's most recent FCFF is PKR 5000,000. DGK's target debt to equity ratio is 0.25. The market value of the firm's debt is PKR 10,000,000 and DG has 2000,000 shares of common stock outstanding. The firm tax rate is 40%, the shareholders require a return of 116% on their investment, the firms before tax cost of debt is 8%, and the expected long term growth rate in FCFF is 5%. Calculate the value of the firm and the value per share of the equity.

Reference no: EM132730246

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