The Debt Capacity for Omicron's new project in year 1 is closest to:
A)$38.75
B)$48.25
C)$50.25
D)$58.00

Question

Quizplus · Accepted Answer

A)r_wacc = 11ea7cce_3c9b_c4f1_928c_0122fe9182ad_TB1626_11 r_E + 11ea7cce_3c9b_c4f2_928c_e3e7f937ad0a_TB1626_11 r_D(1 - τ_c),where D = net debt = Debt - Cash r_wacc = 11ea7cce_3c9b_c4f3_928c_a336b2ede583_TB1626_11 (.12)+ 11ea7cce_3c9b_ec04_928c_b50128425275_TB1626_11 (.06)(1 - .35)= .0876 11ea7cce_3c9b_ec05_928c_b7b3ebb3ba15_TB1626_11 = 11ea7cce_3c9b_ec06_928c_d1b95a08d46f_TB1626_11 + 11ea7cce_3c9c_1317_928c_91826a4fbf89_TB1626_11 = $96.70 D₁ = d × 11ea7cce_3c9c_1318_928c_5116ea5ebabb_TB1626_11 D₁ = 11ea7cce_3c9c_1319_928c_5f45bfe470b6_TB1626_11 ($96.70)= $38.68

The Debt Capacity for Omicron's New Project in Year 1