Calculate the Cost of Debt.

Using the DDM method, calculate the cost of equity.

Using the DDM method, calculate the WAAC.

Using the DDM method, calculate the NPV of the investment.

XYZ Corp. is considering an investment in Project Maverick. This new project requires a $11,000,000 initial investment and will produce annual net after tax cash flows according to the following pro forma: This project will be financed internally. The project is as risky as the firm's current operations. The market values of the firm's equity and debt are $56 million and $44 million respectively. Part 1: Using the CAPM method, calculate the cost of equity