WACC Classic Vs. Vanilla
I've been tasked with calculating the present value of cash flows is the same using both the classic and vanilla version of WACC. Given the following information:
• Required return on equity is 12%
• Required return on debt is 6%
• Constant debt proportion of 40% based on market values
• Corporate tax rate of 30%
Year
0
1
2
3
4
5
Cash Flow
100
90
120
140
150
Any ideas?
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