28.6096 Question 13 20 pts JamBanz is looking to launch a next edition of its hit video game, RockTour 6. RockTour 6 will cost $11 million to develop and produce new cash flows of $4.5 million for the next three years. The release of RockTour 6 is also expected to cannibalize sales of the prior version of the game, RockTour 5. JamBanz expects cash flows for RockTour 5 to decline by $2.5 million for the next two years. If JamBanz's cost of capital is 8.2%, should it go ahead with the launch of RockTour 6? No, destroys $1.94 mil No, destroys $3.89 mil Yes, creates $0.56 mil Indifferent, creates $0.00 mil 20 pts Question 14 After-tax cost of debt decreases: firms are more likely to issue debt After-tax cost of debt increases; forms are more likely to issue debt Question 4 20 pts The stocks of Firm A and Firm B each have the same standard deviation, but the beta of Firm A is higher than Firm B's. Which firm has the higher systematic risk? Which firm has the higher firm-specific risk? Firm A has higher systematic risk: Both forms have same firm-specific risk Both firms have same systematic and firm-specific risk Firm A has higher systematic risk and firm-specific risk Both firms have same systematic risk; Firm A has higher firm-specific risk 20 pts J Question 5