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Cumming Inc. has a capital structure which is based on 40 % debt, 10 % preferred stock, and 50 % common stock. The after-tax cost
Cumming Inc. has a capital structure which is based on 40 % debt, 10 % preferred stock, and 50 % common stock. The after-tax cost of debt is 6 %, the cost of preferred is 7 %, and the cost of common stock is 9 %. The company is considering a project that is equally as risky as the overall firm. This project has initial costs of $125,000 and cash inflows of $76,000 a year for two years. What is the projected net present value of this project?
Question 49 options:
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$11,403.03
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$11,398.16
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$11,275.07
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