Star Flop

250 50
Asset 100 100 Expected Value of the firm 150
NPV 30 30 Worth post new investment 280
New Investment 90 90 32.14%
Worth 380 180
Equity increase 23.68% 50.00%
Investment? No Yes
Pre-tax earning 2
Growth rate 3%
Beta 1.2
D 5
Risk Premium 0.50%
EMRP 4.00%
Risk Free Rate 5.00%
Ra 9.800%

Software GSSoftware ASoftware B Data centres

Data
GS centres
Data
A centres B

Beta unlevered = Beta assets = 0.66 1.02

Beta equity 2.03 2.26 0.9 1.35
Beta Debt 0.08 0.11 0.2 0.85
D/E Ratio 0.12 0.16 0.78 2.89

Tax Rate 35%

Rf 2.96
EMRP 7.48%

Re 3.111844
Beta U

1.8889054 2.0574638 0.664499 1.0237016

 Sharp Nice
D/E