1018-251 The table and timetine below thene the capital trocture (weig tig and free cash fiow enumates constant rate of 4% permancnily aher there years) Answer the following 4uestione with the addirional. information given below, [Tax] Fifective tax rase 40% [Debt] Its long-1eren bond with I 5 yeans maturity, 8% semianual coupons, and $1,000 face value is curreraly traded at 5918.56 (No floatation cost, just for simglicity) [Preferred stock] 5 dividend-payiny (anumally) preferret stock is currently traded at $40. [Comaraen stock] - The common stock that paid a 53 dividend at the last yeatend is rove traded at 340 , and the dividend is cxpected to grow at 5% per year. * The risk-feec rate is 3%, the market risk premicm is 6%, and its beta is 1.5. - According sto studies, 3.5% bond yicld risk premium on comenos stocks is adeled to the lotigterm band yield. 18. Calculate the eost of debe capital after tax (assuming no floatation costs). ( peies) (1) 2.7 is (1) 4 swe (3) 5.4% (9) 9.00= 19. Calculate the cost of prefermed stock (assuming no floatation costs). (3 poinsy) (1) 7,076 (2) 8,4% (30. 10.08/6 (4) 12.03% nus 330: Friecigles af Finanet Stadent iD No.I Name (L.ast, Virst): d 12,ins (8) 12.5% (9) 12.9% (9) Irions 27. Uve the capital asser pricine modef (CAPM). O polati) do 6.056 (2) 7.295 (3) 7.5% (8) 12,045 22. 1d14 to bond-yield premium sa the long-term bond ylesd obeained. rointey (B) 6.7% (d) 8.5% (10) 9.4% (4) 13.06 Using the average of the thare acinures from Q20- 22 for the cost of coemonon equity, calkulate the weighted average cost of capital (WMCC) (4 poitsa). (1) 10.00s (2) 10.12% (1) 10.8386 (4) 12.00ca (Q23-24) Calculate the acw investment groject NI'V (net pessent value) when the cost of this: project todey is $300 mil. (The FCFs from this investment penject is in million dollars unit) 24. What is the 1FV at 132 ( 3 peinte) (1) $381.77mil. (2) 5450.00mil. 6) 9490.20 mil. (4) 5509.80mil. 25. What is the project NPV after subtricting the cost. (300) at 1=02 shoald the fim accept or reject this project? (4 point) (2). NPV:-s47.06 mil, reject (2) NPV: $209.80mil, dccept (10) NPV: $215.61 mil, accept (4) NPV; $515,61 mil. accopt 1018-251 The table and timetine below thene the capital trocture (weig tig and free cash fiow enumates constant rate of 4% permancnily aher there years) Answer the following 4uestione with the addirional. information given below, [Tax] Fifective tax rase 40% [Debt] Its long-1eren bond with I 5 yeans maturity, 8% semianual coupons, and $1,000 face value is curreraly traded at 5918.56 (No floatation cost, just for simglicity) [Preferred stock] 5 dividend-payiny (anumally) preferret stock is currently traded at $40. [Comaraen stock] - The common stock that paid a 53 dividend at the last yeatend is rove traded at 340 , and the dividend is cxpected to grow at 5% per year. * The risk-feec rate is 3%, the market risk premicm is 6%, and its beta is 1.5. - According sto studies, 3.5% bond yicld risk premium on comenos stocks is adeled to the lotigterm band yield. 18. Calculate the eost of debe capital after tax (assuming no floatation costs). ( peies) (1) 2.7 is (1) 4 swe (3) 5.4% (9) 9.00= 19. Calculate the cost of prefermed stock (assuming no floatation costs). (3 poinsy) (1) 7,076 (2) 8,4% (30. 10.08/6 (4) 12.03% nus 330: Friecigles af Finanet Stadent iD No.I Name (L.ast, Virst): d 12,ins (8) 12.5% (9) 12.9% (9) Irions 27. Uve the capital asser pricine modef (CAPM). O polati) do 6.056 (2) 7.295 (3) 7.5% (8) 12,045 22. 1d14 to bond-yield premium sa the long-term bond ylesd obeained. rointey (B) 6.7% (d) 8.5% (10) 9.4% (4) 13.06 Using the average of the thare acinures from Q20- 22 for the cost of coemonon equity, calkulate the weighted average cost of capital (WMCC) (4 poitsa). (1) 10.00s (2) 10.12% (1) 10.8386 (4) 12.00ca (Q23-24) Calculate the acw investment groject NI'V (net pessent value) when the cost of this: project todey is $300 mil. (The FCFs from this investment penject is in million dollars unit) 24. What is the 1FV at 132 ( 3 peinte) (1) $381.77mil. (2) 5450.00mil. 6) 9490.20 mil. (4) 5509.80mil. 25. What is the project NPV after subtricting the cost. (300) at 1=02 shoald the fim accept or reject this project? (4 point) (2). NPV:-s47.06 mil, reject (2) NPV: $209.80mil, dccept (10) NPV: $215.61 mil, accept (4) NPV; $515,61 mil. accopt
