5. For independent projects, a corporation should accept the project as long as its ero or ts _ is greater than or equal to the corporation's WACC. a PB, NPV b. IRR, EAA . NPV, IRR d. EAA, MIRR Triplin Corporation's marginal tax rate is 35%. It can issue 10-year bonds with an annual coupon rate of 7% and a par value of $1,000. After $12 per bond flotation costs, new bonds will net the company $966 in proceeds. Determine the appropriate after-tax cost of new debt for Triplin to use in a capital budgeting analysis. a. 2.62% b. 4.8796 c. 7.50% d. 73% 7. Kharnila Corp. is considering the purchase of a new factory and would like to finance the purchase with a combination of debt and equity. The factory will cost $260,000 total, of which S110,000 will be financed by new common stock. The remainder will be financed by debt. What is the proportion of debt financing for use in the WACC calculation? a. 73.3% b. 57.796 C. 42.3% d. 26.7% 8. Jiffy Co. expects to pay a dividend of $2.00 per share in one year. The current price of Jiffy common stock is $28 per share. Flotation costs are $2.00 per share when Jiffy issues new stock. What is the cost of internal common equity (retained earnings) if the long-term growth in dividends is projected to be 7 percent indefinitely? a. 13.37% b. 14.14% c. 15.06% d. 16.23% 9. Aphid Corp. will finance its next major expansion with 40% debt, 10% preferred stock, and 50% retained earnings. Aphid's after-tax cost of debt is 6%, cost of preferred stock is 8%, and cost of retained earnings is 12%. What is the corporation's weighted average cost of capital? b. 10.4% c. 9.2% 2 of 5