Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

answer on excel A project is financed by Equity, Debt and Preferred Stock. There are 3,000,000 shares of equity shares trading at 51 each. The

answer on excel
image text in transcribed
A project is financed by Equity, Debt and Preferred Stock. There are 3,000,000 shares of equity shares trading at 51 each. The market value of the PS is $3,000,000 and there are 3,000,000 shares outstanding. There are 3,000,000 bonds outstanding trading at $1 each. It is a 7 year MACRS project (14.294; 24.499% 17.49%; 12.494; 8.939; 8.934 8.934 4.4596) and the salvage value is 3% of the cost of the project. You are also given the following information Units Price/Unit INC NWC 12500 $1650 52070 15% 12 3500 $ 1650 $20/0 15% 3 3200 $1100 154/5 8% 2300 $1250 154/5 9 52100 $1250 56/U 129 2100 $800 $4/0 129 1100 $600 84/5 99% Foxed Costs are $150,000 each year, the initial NWC is $100,000 all the NWC is returned by the project to the firm at the end of its life. The Cost of Equity is 12%; the Cost of PS is 6% and the Cost of Debt is 4%. Find the NPV and IRR if taxes are 25%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fiduciary Finance Investment Funds And The Crisis In Financial Markets

Authors: Martin Gold

1st Edition

1848448953, 9781848448957

More Books

Students also viewed these Finance questions