Question
A Company has a total Debt of $500,000 and its Equity is $500,000. Short-term debt is 35.00% of its Total Debt and costing 8.0% while
A Company has a total Debt of $500,000 and its Equity is $500,000. Short-term debt is 35.00% of its Total Debt and costing 8.0% while its Long-term debt is costing 6.0%. The cost of Equity is found using D1 = $2.00, Po = $20.00 while its growth is 2.0%. Find the Cost of Capital for the Company if the Corporate Tax is 45.00%.
Question 7 options:
| 7.8742% |
| 9.2534% |
| 7.8425% |
| 8.8425% |
A Company has a Cost of Capital of 25.25%, and has decided to invest into a new project costing $27,451. It expects the total cash flow to be in year 1 = $50,000, year 2 = -$5,000, year 3 = -$15,326, year 4 = $98,500 and the final year to be: -$40,000. Find the NPV of the project and decide if you should: Accept or Reject it.
Question 8 options:
| -$60,250.3287, Reject |
| $60,250.3287, Accept |
| -$28,529.4349, Reject |
| $28,529.4349, Accept |
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