Valuation of British Telecom 1984

Essay specific features

 

Issue:

Business

 

Written by:

Ricky V

 

Date added:

June 22, 2016

 

Level:

University

 

Grade:

A

 

No of pages / words:

4 / 961

 

Was viewed:

5265 times

 

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Essay content:

We used this beta to compute the ?e using BT’s capital structure, and tax rate. ?e = ?a * (1 + (D/E * (1 – tax))) = 0.99 Using the ?e, a risk-free rate of 10.6%, and a market premium of 5%, we calculated the cost of equity to be 15.55% ke = rf + ?e * (risk premium) = 15.55% Based on the information in the case, stating that the interest rate on unsecured loans varies between 12...
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We used this beta to compute the ?e using BT’s capital structure, and tax rate. ?e = ?a * (1 + (D/E * (1 – tax))) = 0.99 Using the ?e, a risk-free rate of 10.6%, and a market premium of 5%, we calculated the cost of equity to be 15.55% ke = rf + ?e * (risk premium) = 15.55% Based on the information in the case, stating that the interest rate on unsecured loans varies between 12...
displayed 300 characters

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