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What is the market value of debt

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Question - You are reviewing a valuation spreadsheet on Leopold Limited prepared by an analyst and note that the following assumptions were used:

Risk free rate (Rf) = 3%

Equity Risk Premium = 5%

Tax Rate = 25%

Pretax Cost of Debt = 6.0%

Cost of Equity =12%

WACC =9.9%

Market capitalization of Leopold = $180 million

Required -

a. What is the Beta used by the analyst to calculate Leopold's cost of equity?

b. What is the market value of debt?

Reference no: EM133116278

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