Cost of Debt: 80 year bonds Current price 101.5% of par value 7.6% coupon Rate semi Anuual Bond 12 years to maturity Tax Rate:40% What is the Cost of Debt? Preferred Stock Dividend $7.50 Current Price $60.00 What it the Coil of Preferred? Equity Risk Free Rate 6.50% Market Risk Premium 6.25% Stock Beta 0.7 What is the Cost of Equity? Debt/Equity 10,000 Bonds Outstanding Selling @ 101.5% of par value 43,000 preferred Stock @ $40.00 per share What is the WACC? Given the WACC calculate the NPV for the following capital budgeting decision Investment is: $300,000 Cash Flows 1st Year -55,000 2nd Year 65,000 3nd Year 75,000 4th Year 85,000 5th Year 150,000 NPV is Decision(Circle One) Calculate Payback