1.

Suppose a firm has 30.30 million shares of common stock outstanding at a price of $17.99 per share. The firm also has 370000.00 bonds outstanding with a current price of $1,065.00. The outstanding bonds have yield to maturity 9.55%. The firm's common stock beta is 0.929 and the corporate tax rate is 40.00%. The expected market return is 12.66% and the T-bill rate is 1.08%. Compute the following:

a) Weight of Equity of the firm:

b) Weight of Debt of the firm:

c) Cost of Equity of the firm:

d) After Tax Cost of Debt of the firm:

e) WACC for the firm:

2.

A firm has a WACC of 12.41% and is deciding between two mutually exclusive projects. Project A has an initial investment of $62.33. The additional cash flows for project A are: year 1 = $18.52, year 2 = $37.05, year 3 = $42.40. Project B has an initial investment of $74.90. The cash flows for project B are: year 1 = $52.39, year 2 = $37.44, year 3 = $38.28. Calculate the Following:

a) Payback Period for Project A:

b) Payback Period for Project B:

c) NPV for Project A:

d) NPV for Project B:

3.

Project Z has an initial investment of $65,333.00 . The project is expected to have cash inflows of $21,992.00 at the end of each year for the next 12.0 years. The corporation has a WACC of 10.62%.

Calculate the NPV for project Z: