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What is the value of a project with average risk

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Question - Suppose? Alcatel-Lucent has an equity cost of capital of 10.4%?, market capitalization of $11.04 ?billion, and an enterprise value of $16 billion. Suppose? Alcatel-Lucent's debt cost of capital is 6% and its marginal tax rate is 37%.

Required -

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?

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

Reference no: EM132780485

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