53) The cost of common stock using DCF method when D, is Rs 10 and grows at 8% constantly and stock sells at Rs 80 with Rs 20 flotation cost is % a) {10/(80-20) - 0.08 b) {10(1.08) (80-20)} - 0.08 c) {10(1.08)/(80-20) + 0.08 {10(1.08)/(80-20)} - 0.08 e) {10(1.08)/(80-20)} 1.08 54) If interest rate is 10% with 40% tax rate, cost of common & preferred stock is 12%& 14%, & the firm finances 40% with debt& 10% with preferred stock then the WAAC is % a) 10x0.4x0.4 + 14x0.1 + 12x0.5 b) 10x0.6x0.4+12x0.1 + 14x0.5 10x0.6x0.6 + 14x0.1 + 12x0.5 d)10x0.6x0.4 -14x0.1 - 12x0.5 e)10x0.6x0.4 + 14x0.1 + 12x0.5 CAPITAL BUDGETING TECHNIQES 55) If a project requires an initial investment of Rs 1000 and will generate Rs 300 annually for the next 5 years with 10% cost of capital then it's payback period is....... ....years approximately a) 2+100/300 b) 3+100/300 c) 2+200/300 d) 3+200/300 e) 4+200/3001) 3+300/200 56) The discounted payback period for the above project is.... .years when the DCFs are 273+248+225+205+186= 1137. (273+248+225+205=951) a) 4+49/186 b) 3+49/186 c) 2+49/186 d) 5+49/186 e) 6+49/186 f) 1+19/186 57) The NPV for the above project is Rs........ a) 300/1.1-1100 b) 300x1.1-1100 c) 300{1-1/ (1.1)}/0.1 d) 300{1-17 (1.1)"}/0.1- 1000 e) 1150-1100 f) 1137-1100