Firm T wants to get Firm C
C has $20 M shares outstanding target capital structure 30% debt 70% equity C debt with interest rate 8% risk free interest @ 2% market premiu 8%
Calculate:
Rate of return equity use r s = r RF + RP m ( b )
Weigh avg cost of capital use W A C C = W drd ( 1 - percent) + wsrs or (w8r8)?
Vaule operations Vops = F C F 0 (1+g) / W A C C -g)
Firm equity Vs= V ops-debt
Vaule current company stock price (per) share =VS /outstanding shares