18. In case of conflict one should always choose the IRR method (over the NPV method) because the IRR is inherently superior to the NPV method. 19. If a firm raises capital by selling new bonds, it could be called the "issuing firm," and the coupon rate is generally set equal to the required rate of bonds of equal risk. 20. Ehrmann Data Systems is considering a project that has the following cash flow and WACC data. What is the project's MIRR? Note that a project's projected MIRR can be less than the WACC (and even negative), in which case it will be rejected. WACC: 10.00% Year -$1,000 $450 $450 $450 Cash flows a. 9.00% b. 10.00% c. 11.00%. d. 12.00% e, 14.00% 21. How much would $5,000 due in 25 years be worth today if the discount rate were 5.0%? a. $1,476.52 b. $1,124.16 c, $1,183.33 d $1,245.61 e, $1,311.17 22. Assume that you are a consultant to Broske Inc., and you have been provided with the following data: D1 -$0.67; Po-$27.50; and g 8.00% (constant). What is the cost of equity from retained earnings based on the DCF approach? a. 9.42% b. 9.91% c. 10.44% d. 10.96% e. 11.51% 23. You were hired as a consultant to Giambono Company, whose target capital structure is 40% debt, 15% preferred, and 45% common equity. The after-tax cost of debt is 6.00%, the cost of preferred is 7.50%, and the cost of retained earnings is 12.75%. The firm will not be issuing any new stock. What is its WACC? a. 8.98%. b, 9.26% c. 9.54% d. 9.83% e 10 120