Determine the value of company cost of equity

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Question - PT XYZ is a garment company that produces batik and other traditional clothing. The company's financial data is as follows. Earnings before interest and taxes or EBIT = Rp150.000.000 Corporate tax rate or TC = 25% Amount of debt or D = Rp600.000.000 Unlevered cost of capital or RU = 20%. The cost of debt or RD = 8%. Based on these financial data, determine:

a. Determine the value of company equity

b. Determine the value of company cost of equity.

c. Determine the value of company WACC.

d. Provide your analysis of the debt taken by the company whether it brings an advantage or not!

Reference no: EM133178014

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