please answer questions 1 and 2 all parts and show working and formulas where necessary. Thanks in advance. 1. Tesla has $50m in assets, which is financed with 40% debt and 60% equity. The company's beta is currently 1.25 and its tax rate is 30%. Using the Hamada equation, find Tesla's unlevered beta. 2 Firms HD and L.D each has $30m in invested capital, $8m of EBIT, a tax rate of 25%. Firm HD has a D/E ratio of 50% with an interest rate of 8% on their debt. Firm D has a debt-to capital ratio of 30%, however, pays 9% interest on their debt. Calculate the following: a. Retum on invested capital for each firm b. Return on equity for each firm c. If HD's CFO is thinking of lowering the D/E from 50% to 40%, which will lower their interest rate further from 8% to 7%, calculate the new ROE for HD.

please answer questions 1 and 2 all parts and show working and formulas where necessary. Thanks in advance. 1. Tesla has $50m in assets, which is financed with 40% debt and 60% equity. The company's beta is currently 1.25 and its tax rate is 30%. Using the Hamada equation, find Tesla's unlevered beta. 2 Firms HD and L.D each has $30m in invested capital, $8m of EBIT, a tax rate of 25%. Firm HD has a D/E ratio of 50% with an interest rate of 8% on their debt. Firm D has a debt-to capital ratio of 30%, however, pays 9% interest on their debt. Calculate the following: a. Retum on invested capital for each firm b. Return on equity for each firm c. If HD's CFO is thinking of lowering the D/E from 50% to 40%, which will lower their interest rate further from 8% to 7%, calculate the new ROE for HD.

Name: please answer questions 1 and 2 all parts and show working and formula
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Description: please answer questions 1 and 2 all parts and show working and formulas where necessary. Thanks in advance.1. Tesla has $50m in assets, which is financed with 40% debt and 60% equity. The company's beta is currently 1.25 and its tax rate is 30%. Usin

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter12: The Cost Of Capital

Section: Chapter Questions

Problem 12P

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