Question
1.You are considering opening another restaurant in the TexasBurgers chain. The new restaurant will have annual revenue of $274,200 and operating expenses of $137,100. The
1.You are considering opening another restaurant in the TexasBurgers chain. The new restaurant will have annual revenue of $274,200 and operating expenses of $137,100. The annual depreciation and amortization for the assets used in the restaurant will equal $45,700. An annual capital expenditure of $10,000 will be required to offset wear-and-tear on the assets used in the restaurant, but no additions to working capital will be required. The marginal tax rate will be 40 percent. Calculate the incremental annual after-tax free cash flow for the project._____________
2. Blossoms Copper Corp. management expects its common stock dividends to grow 1.44 percent per year for the indefinite future. The firms shares are currently selling for $17.55, and the firm just paid a dividend of $3.00 yesterday. What is the cost of common stock for Blossom? (Round answer to 2 decimal places, e.g. 15.25%.)
Cost of common stock______________ |
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