Attempts. 5. Solving for the MAcc Aa Aa a The MAO is used as the discount rabe to evaluate various capital budgeting pmjects. However,itis important to realize that the NIADCis an appropriate discount rate only for a pmjectof average Analyze the cost of capital situations of the following company cases, and answer the spech: questoms that finance pmfessionals need to address. Consider the c ase of Turnbul Tumbul o. has a target capital stnucture of 58% debt, If its current tax rate is 40s, how much higherwil preferred stod, and 36 s com man equity. It has a Tumbuhs weighted average cost of capital (WACO be it has to raise additional man equity capital by issuing new com stud instead of raising the funds man before tax crest of debt af 11.1%, and its cnst preferred stod is 12.2%. through retained earmingsa If Tumbul can raise all of its equity capital from retained O 0.64% earmings, is cost of com man equity wil be 14.7%. However, itisnecessaryto raise new comm man equity, O 0.75 will camy a cost of 163s O 1.01% Tumbul o. is considering a pmjectthat requi res an inital investment of $270,000. The firm wi raise the $270,000 in capital by issuing $100,000 of debt at a befare-tax cost of 11.1%, $30,000 of prefemed tad at a cost of 12.2 and $140,000 of equity at a cost of 14.7 The firm faces a tax rate of 40%. What wil bethe VIAD forthis pmject? Consider the case of Kuhn Co Kuhn O. is considering pmjet that w re an inital investment $45 millon It has a target capital structure of 45 debt, 4% pretened stadk, and 51% com man equity. Kuhn has nonalable bonds oustanding that mature in five years with a face value of $1,000, an annual coupon rate of 10%, and a market price of $1,050.76. The yield on the company's current bonds isagood approodmation of the yield onany new bonds that issues. The company can sell shares of pnsemed stod that pay an annua dividend of at a price of $2.2s per share. Kuhndoes not have any retained earnings available to finance this pmjet, so the firm wil haveto issue new man stod to help fund it. Its com man stock is currentdyseling for $22.3s per share, and itis expectedto pay a dividend of $1.36 at the end of next year. Fotation costs wi represent 3 of the funds raised by issung new man stock. The company is pmjeted to gmw at a rate of B.7s, and they face atax rate of 40% Determine what Kuhn ompany's VIADC will be for this pmjet