Antel hires you to assess whether 10 % is the right discount factor to evaluate

| April 14, 2018

Antel hires you to assess whether 10 % is the right discount factor to evaluate the new chip line. Antel has an equity beta of 0.9 and a market equity to capital ratio of 1.2. The risk free rate is 3 %,the market risk premium is 6 %. Assume that Antel is currently at its target capital structure and it invests any excess cash in risk free assets. 2. What is the WACC of Antel?

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