Question
A project requires an initial investment of $500,000. This project will generate a future cash flow of $100,000/year for 8 years. The WACC of the
A project requires an initial investment of $500,000. This project will generate a future cash flow of $100,000/year for 8 years. The WACC of the firm is 8%. The cost of equity of this firm is 12%. The cost of debt of this firm is 6%. The risk-free rate is 3%. The floatation cost of equity is 3%. The floatation cost of debt is 1%. The target debt-to-equity ratio is 0.5. What is the NPV of this project?
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A Guide To Starting Your Hedge Fund
Authors: John Thompson, Erik Serrano Berntsen
1st Edition
0470519401, 978-0470519400
