FIN3701 Assignment 2 (COMPLETE ANSWERS) Semester 1 2026 - DUE 17 April 2026; 100% trusted ,comprehensive and complete reliable solution with clear explanation.

, FIN3701 Assignment 2 (COMPLETE ANSWERS) Semester 1 2026
- DUE 17 April 2026; 100% trusted ,comprehensive and complete
reliable solution with clear explanation.


QUESTION 1.1: Calculate WACC (3 marks)

📌 𝑭𝒐𝒓𝒎𝒖𝒍𝒂:

𝑊𝐴𝐶𝐶 = (𝐷/𝑉 × 𝑅𝑑 × (1 − 𝑇)) + (𝐸/𝑉 × 𝑅𝑒)𝑊𝐴𝐶𝐶
= (𝐷/𝑉 × 𝑅𝑑 × (1 − 𝑇)) + (𝐸/𝑉 × 𝑅𝑒)𝑊𝐴𝐶𝐶
= (𝐷/𝑉 × 𝑅𝑑 × (1 − 𝑇)) + (𝐸/𝑉 × 𝑅𝑒)

𝑊ℎ𝑒𝑟𝑒:

 𝐷/𝑉 = 𝐷𝑒𝑏𝑡 % = 𝟑𝟎% = 𝟎. 𝟑
 𝐸/𝑉 = 𝐸𝑞𝑢𝑖𝑡𝑦 % = 𝟕𝟎% = 𝟎. 𝟕
 𝑅𝑑 = 𝐶𝑜𝑠𝑡 𝑜𝑓 𝑑𝑒𝑏𝑡 = 𝟏𝟐% = 𝟎. 𝟏𝟐
 𝑅𝑒 = 𝐶𝑜𝑠𝑡 𝑜𝑓 𝑒𝑞𝑢𝑖𝑡𝑦 = 𝟏𝟓% = 𝟎. 𝟏𝟓
 𝑇 = 𝑇𝑎𝑥 𝑟𝑎𝑡𝑒 = 𝟐𝟖% = 𝟎. 𝟐𝟖



📌 𝑺𝒕𝒆𝒑 𝟏: 𝑨𝒇𝒕𝒆𝒓 − 𝒕𝒂𝒙 𝒄𝒐𝒔𝒕 𝒐𝒇 𝒅𝒆𝒃𝒕

0.12 × (1 − 0.28) = 0.12 × 0.72 = 0.08640.12 × (1 − 0.28)
= 0.12 × 0.72 = 0.08640.12 × (1 − 0.28) = 0.12 × 0.72
= 0.0864


📌 𝑺𝒕𝒆𝒑 𝟐: 𝑨𝒑𝒑𝒍𝒚 𝑾𝑨𝑪𝑪 𝒇𝒐𝒓𝒎𝒖𝒍𝒂

𝑊𝐴𝐶𝐶 = (0.3 × 0.0864) + (0.7 × 0.15)𝑊𝐴𝐶𝐶
= (0.3 × 0.0864) + (0.7 × 0.15)𝑊𝐴𝐶𝐶
= (0.3 × 0.0864) + (0.7 × 0.15) = 0.02592 + 0.105
= 0.02592 + 0.105 = 0.02592 + 0.105 = 0.13092 = 13.09%
= 0.13092 = 13.09\% = 0.13092 = 13.09%