Your company estimates its WACC. You know the following information: a. The company’s capital structure consists of 60% common equity and 40% debt b. Tax rate is 40% c. Your company has 20-year bonds outstanding with a 9%annual coupon and currently that bond is trading at par d. 5.5% is the risk-free rate e. 5% is the market risk premium f. 1.4 – is the company stock’s beta Calculate the company’s WACC. ————————————————————————————————————————————————————————————————————The WACC is 7.5%. Project: Investment / NPV / IRR A: 3000 / -0.99 / 14% B: 2500 / 500 / 5% C: 2750 / 145 / 11% D: 4250 / 1 / 7.4% a. Based on NPV which project or projects would you select? Projects are mutually exclusive. b. Based on NPV which project or projects would you select? Projects are independent. c. Based on IRR which project or projects would you select? Projects are mutually exclusive. d. Based on IRR which project or projects would you select? Projects are independent. e. Based on NPV and IRR which project or projects would you select? Projects are mutually exclusive. f. Based on NPV and IRR which project or projects would you select? Projects are independent
Freebies just for you
We are available 24/7
We help you complete college assignments in under 24 hours.
Get help with essays, research papers, PowerPoint Presentations, reports, reviews, and projects at incredibly low prices.
Based on NPV which project or projects would you select?
Custom Papers
We will write a custom paper for you at $15.50 $11/page
Free title page
Free reference page
Free formatting
Unlimited revisons
EssayTab is hands down the best essay writing service for college students. I was initially skeptical about the quality of a product that has such a low price point but I can tell you that it’s worth every penny! I’ve been using EssayTab for my essays in college as well as in grad school, and they always deliver excellent content.
College Student