Cost of Capital - Ohio Company is considering investment in a new project, code named "Ford." The

Cost of Capital Ohio Company is considering investment in a new project, code named "Ford." The incremental cash flows for Ford are: Year O -$8 000 000 Year 1 000 000 Year 2 $2 000 000 Year 3 $4 000 000 Year 4 $4 000 000 Project Ford has the same average risk as Ohio Company, and it will be financed in the same debt and equity proportions as Ohio Company. Your research has uncovered the following information about Ohio Company and the financial markets: Beta coefficient for Ohio common stock Common stock on Ohio balance sheet Coupon interest rate on Ohio bonds Current market price for Ohio bonds 1.15 $69,100,000 5.95% $1,092.30 (these bonds are $1,000.00 par value, semi-annual bonds, maturing on December 12, 2048) Current market price for Ohio common stock Current market yield for long-term Treasury Bonds Ohio's income tax rate Long-term debt on Ohio's balance sheet Number Of shares Of Ohio common stock issued and outstanding Par value of Ohio common stock $70.27 4.20% 25% 1972 to 2021 average annual yield on an investment in long-term Treasury Bonds 1972 to 2021 average annual yield on an investment in common stocks $45.36 5.4% 12.3% What is the cost of capital for Project Ford? What is the Net Present Value of Project Ford? Should Ohio accept or reject project Ford? Question #1.B. Ohio Company's treasurer asks you to calculate the company's weighted cost of capital Ohio capital structure is changed to 30% debt and 70% equity. What is your estimate of Ohio's WACC under this new capital structure?