Due to the recent decline in stock price, Apple is considering the following two mutually exclusive projects. Suppose Apple currently has:

5,000 8-year, 6% semi-annual coupon bonds at par (face value = $1,000);

4,0000 shares outstanding, price = $161.84.

= 1.21. Market risk premium: 6%; Risk-free rate: 2%; Tax rate: 35%.

Which project should you accept and why? (6 marks)

5 KB) (2) Due to the recent decline in stock price, Apple is considering the following two mutually exclusive projects. Suppose Apple currently has: 5,000 8-year, 6% semi-annual coupon bonds at par (face value =$1,000); 4.0000 shares outstanding. price = $161.84. B=1.21. Market risk premium: 6%; Risk-free rate: 2%: Tax rate: 35%. Year 0 wNOK Project A -$48.000 $18,400 $31,300 $11,700 Project B -$126,900 $69,700 $80.900 $0 2 Which project should you accept and why? (6 marks) O @