Question
. cooperate B is financing only with bonds and stocks. - Debt Information: - $100 million outstanding bonds, current quote = 95, coupon rate =
. cooperate B is financing only with bonds and stocks.
- Debt Information:
- $100 million outstanding bonds, current quote = 95, coupon rate = 5.5% with semiannual coupons payment, 5 years maturity, and Tax rate = 35%
- Equity Information:
- 50 million outstanding shares, $15 per share, beta = 1.3, market risk premium 5%, and risk-free rate = 1.5%
1. What is the cost of equity?
2. What is the after-tax cost of debt?
3. What are the capital structure weights?
4. What is the WACC?
5. Please assess whether or not the project should proceed (show the process of how you got the answer). describe in details please answer this as soon as possible
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