Question
1) What is the WACC for a firm with 20% debt, 10% preferred stock, and 70% common equity if the respective costs for these components
1) What is the WACC for a firm with 20% debt, 10% preferred stock, and 70% common equity if the respective costs for these components are 8% before tax cost, 12% before tax cost of preferred stock, and 18% before tax cost of common equity? the firm's tax rate 35%
2) Calculate the NPV for a project with the following cash flows, a weighted average cost of capital of 9% and an initial investment of$20,000
year 1: $5,000
year 2: $8,000
year 3: $14,000
3) a company has divided of $2 per share, earnings per share of $8 and plowback ratio of 75%. What is the payout ratio?
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