1.ABC Company has publicly traded $1,000 par value, 6% semiannual coupon bonds which mature in 18 years.These bonds have a current market price of $915.The company also has preferred stock with a $70 par and 6% annual dividend.The market has priced the preferred stock at $89.ABCs common stock has a beta of 1.5.You estimate the risk-free rate to be 3% and the required return on the market to be 14%.The companys average tax rate is 34%.

What is this companys after-tax cost of debt?

2.ABC Company has publicly traded $1,000 par value, 6% semiannual coupon bonds which mature in 18 years.These bonds have a current market price of $915.The company also has preferred stock with a $70 par and 6% annual dividend.The market has priced the preferred stock at $89.ABCs common stock has a beta of 1.5.You estimate the risk-free rate to be 3% and the required return on the market to be 14%.The companys average tax rate is 34%.

What is the cost of the companys common stock

3.You are considering a project that requires an initial investment of $98,000 with a cost of capital of 14%.You expect the project to have a five-year life, and produce cash flows of $19,000 in year 1, $32,000 in year 2, $54,000 in year 3, $26,000 in year 4 and $10,000 in year 5.

What is this projects net present value

4.You are considering a project that requires an initial investment of $98,000 with a cost of capital of 14%.You expect the project to have a five-year life, and produce cash flows of $19,000 in year 1, $32,000 in year 2, $54,000 in year 3, $26,000 in year 4 and $10,000 in year 5.

What is this projects discounted payback period