What is? alcatel-lucent wacc

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Reference no: EM133114490

Suppose? Alcatel-Lucent has an equity cost of capital of 9.3%?, market capitalization of $8.97 ?billion, and an enterprise value of $13 billion. Suppose? Alcatel-Lucent's debt cost of capital is 7.1% and its marginal tax rate is 38%.

a. What is? Alcatel-Lucent's WACC?

b. If? Alcatel-Lucent maintains a constant? debt-equity ratio, what is the value of a project with average risk and the expected free cash flows as shown? here,

Year

0

1

2

3

FCF ($ million)

-100

45

103

70

c. If? Alcatel-Lucent maintains its? debt-equity ratio, what is the debt capacity of the project in part ?(b?)?

Reference no: EM133114490

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