An all-equity financed company has a cost of capital of 10 percent. It owns one asset: a mine capable of generating $105 million in free cash flow every year for five years, at which time it will be abandoned. A buyout firm proposes to purchase the company for $400 million financed with $350 million in compound interest debt to be repaid in five, equal, end-of-year payments and carrying an interest rate of 7.5 percent. Calculate the annual debt-service payments required on the debt. Ignoring taxes, estimate the rate of return to the buyout firm on the acquisition after debt service.

A security analyst has regressed the monthly returns on Exxon Mobil equity shares over the past five years against those on the Standard & Poors 500 stock index over the same period. The resulting regression equation is r_EM = 0.07 + 1.55r_SP. Use this equation to estimate Exxon Mobils equity beta.

You have the following information about Burgundy Basins, a sink manufacturer.

Equity shares outstanding	20	million
Stock price per share	$ 34
Yield to maturity on debt	9.5%
Book value of interest-bearing debt	$ 325	million
Coupon interest rate on debt	3.9%
Market value of debt	$ 220	million
Book value of equity	$ 360	million
Cost of equity capital	10.8%
Tax rate	35%

Burgundy is contemplating what for the company is an average-risk investment costing $28 million and promising an annual ATCF of $4.4 million in perpetuity.

1. What is the internal rate of return on the investment?

   Note: Round your answer to 2 decimal places.