Problem:
The following informtion applies, can this be solved using excel?
Equity shares outstanding - 20 million
Stock price per share - 10
Yield to maturity debt - 12
Book value of interest-bearing debt - 180 million
Coupon interest rate on debt - 7%
Market value debt - 200 million
Book value of equity 100 million
Cost of Equity Capital - 15%
Tax rate - 40%
The company is an average-risk investment costing $45 million and has an annual after tax cash flow of $5 million perpetuity. Find the IRR?