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What is the levered value of the? expansion

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Reference no: EM133275830

Tybo Corporation adjusts its debt so that its interest expenses are 22% of its free cash flow. Tybo is considering an expansion that will generate free cash flows of $2.22 million this year and is expected to grow at a rate of 3.8% per year from then on. Suppose? Tybo's marginal corporate tax rate is 26%.

a. If the unlevered cost of capital for this expansion is 10.2%?, what is its unlevered? value?

b. What is the levered value of the? expansion?

c. If Tybo pays 4.6% interest on its? debt, what amount of debt will it take on initially for the? expansion?

d. What is the? debt-to-value ratio for this? expansion? What is its? WACC?

e. What is the levered value of the expansion using the WACC? method?

Reference no: EM133275830

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