solution
solution.
- Georg Schrempp is the CFO of Bayern Chemicals KgaA, a large German manufacturer of industrial, commercial, and consumer chemical products. Bayern Chemicals is privately owned, and its shares are not listed on an exchange. The CFO has appointed Markus Meier, CFA, of Crystal Clear Valuation Advisors, a third-party valuator, to perform a standalone valuation of Bayern Chemicals. Meier had access to the following information to calculate Bayern Chemicals’ weighted average cost of capital:
-The nominal risk-free rate is represented by the yield on the long-term 10-year German bund, which at the valuation date was 4.5 percent.
-The average long-term historical equity risk premium in Germany is assumed at 5.7 percent.
Save your time - order a paper!
Get your paper written from scratch within the tight deadline. Our service is a reliable solution to all your troubles. Place an order on any task and we will take care of it. You won’t have to worry about the quality and deadlines
Order Paper Now-Bayern Chemicals’ corporate tax rate is 38 percent.
-Bayern Chemicals’ target debt-to-equity ratio is 0.7. Bayern is operating at its target debt-to-equity ratio.
-Bayern Chemicals’ cost of debt has to be estimated via YTM approach. 10 years’ coupon bond with 1000$ face value and 8% coupon rate paid annually, and it is traded at premium value of 1200.
"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"
