Here is Icknield’s market-value balance sheet (figures in $ millions):

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Here is Icknield’s market-value balance sheet (figures in $ millions):

Net working capital	$550	Debt	$800
Long term assets	$2150	Equity	$1900
Value of firm	$2700		$2700

The debt is yielding 7%, and the cost of equity is 14%. The tax rate is 21%. Investors expect this level of debt to be permanent.

a. What is Icknield’s WACC?

b. How would the market-value balance sheet change if Icknield retired all its debt?

accounting business finance

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Here is Icknield’s market-value balance sheet (figures in $ millions):

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Here is Icknield’s market-value balance sheet (figures in $ millions):

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