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What is weighted average cost of capital for apollo

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Question - Pearson Enterprises has FCFF of Rs. 1200 million. It's before-tax cost of debt is 7.5 percent, and its required rate of return for equity is 12% percent. The company expects a target capital structure consisting of 50 percent debt financing and 50 percent equity financing. The tax rate is 33.33 percent, and FCFF is expected to grow forever at 5% percent. Cello Enterprises has debt outstanding with a market value of Rs.2.5 billion and has 350 million outstanding common shares.

1. What is weighted average cost of capital for Apollo?

2. What is the value of enterprise using the FCFF valuation approach?

Reference no: EM133116971

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