A company has annual after-tax operating cash flows of P2,000,000 per year which are expected to continue in perpetuity. The company has a cost of equity of 10%, a before tax cost of debt of 5% and an after tax weighted average cost of capital of 8% per year. Corporation tax is 20%. What is the theoretical value of the company? Choices P25m P50m P20m P40m
A company has annual after-tax operating cash flows of P2,000,000 per year which are expected to continue in perpetuity. The company has a cost of equity of 10%, a before tax cost of debt of 5% and an after tax weighted average cost of capital of 8% per year. Corporation tax is 20%. What is the theoretical value of the company? Choices P25m P50m P20m P40m
Chapter10: Capital Budgeting: Decision Criteria And Real Option
Section: Chapter Questions
Problem 6P
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A company has annual after-tax operating cash flows of P2,000,000 per year which are expected to continue in perpetuity. The company has a cost of equity of 10%, a before tax cost of debt of 5% and an after tax weighted average cost of capital of 8% per year. Corporation tax is 20%. What is the theoretical value of the company?
Choices
P25m
P50m
P20m
P40m
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