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Chilly Moose Fruit Producer i s considering a new project that will require a n initial investment o f $ 4 million. I t has
Chilly Moose Fruit Producer considering a new project that will require initial investment $ million. has a target capital structure debt, preferred stock, and common equity. Chilly Moose Fruit has noncallable bonds outstanding that mature five years with a face value $ annual coupon rate and a market price $ The yield the company current bonds a good approximation the yield any new bonds that issues. The company can sell new shares preferred stock that pay annual dividend $ a price $ per share. Assume that Chilly Moose Fruit new preferred shares can sold without incurring flotation costs.
Chilly Moose Fruit does not have any retained earnings available finance this project, the firm will have issue new common stock help fund Its common stock currently selling for $ per share, and expected pay a dividend $ the end next year. Flotation costs will represent the funds raised issuing new common stock. The company projected grow a constant rate and they face a tax rate
Chilly Moose Fruit WACC for this project will :
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