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Cash flows CFO CF1 CF2 CF3 CF4 CF5 CF6 Firm A $160,000 $60,000 $54,500 -$42,000 $72,600 -$14,000 $88,100 Firm A capital structure consists of debts,

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Cash flows CFO CF1 CF2 CF3 CF4 CF5 CF6 Firm A $160,000 $60,000 $54,500 -$42,000 $72,600 -$14,000 $88,100 Firm A capital structure consists of debts, common stocks, and preferred stocks. The tax rate is 35% The return on the equity market index is 9.5% The (total equity/ total debt) ratio is 0.2 The maturity of the bond contract is 20 years. The price of the preferred stock is $42 The systematic risk (Beta) is 0.8 The risk free rate is 3% The coupon rate which paid quarterly is 12% The preferred dividend is $2.75 The current bonds price is $1.8 millions The preferred stocks represent 70% of the total equity The face value of the bonds it issued is $1.5 millions Given the following information presented below and the cash flows in the table above, Compute: a/ WACC (6 marks) b/ NPV, ( 2marks) c/ IRR, (1 marks) d/Payback period (2 marks) e/ Discounted payback period (2 marks) f/ Profitability index (PI) (2 marks)

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