22. Marsaliss Entertainment Corporation has an after-tax cost of debt of 8 percent, a cost of preferred stock of 12 percent, and a cost of equity of 16 percent. What is the WACC, ka, for this company? The capital structure of Marsaliss company contains 20 percent debt, 10 percent preferred stock, and 70 percent equity.

15%

b.

13%

c.

14%

d.

16%

3. Bethlehem corp. borrows $20,000 at 5% and invests in a new machine with a useful life of 5 years. The new Machine generates additional revenues of $10,000/year and additional cost of $2,000/year. The corporation tax rate is 30%. The net annual cash flow is

2,100

b.

6,200

c.

6,100

d.

4,000

14. Mr. Bayyoud is considering an investment of $250,000 in a startup. The cost of capital for the investment is 13%. Following cash flows are expected: year 0($250,000), year 1 $50,000, year 2

$100,000, year 3 $200,000 The MIRR for the proposed investment is.

15.78%

b.

14.66%

c.

14.78%

d.

13.66%