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FINA Inc. considers a project with the following information: Initial Outlay: 1,500 After-tax cash flows: Year 1:$100 Year 2: $1000 Year 3: 5700 FINA's assets

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FINA Inc. considers a project with the following information: Initial Outlay: 1,500 After-tax cash flows: Year 1:$100 Year 2: $1000 Year 3: 5700 FINA's assets are $500 million, financed through bank loans, bonds, preferred stocks, and common stocks. The amounts are as follows: Bank loans: $ 100 million borrowed at 10% Bonds: 5180 million, paying 99 coupon with quarterly payments, and maturity of 5 years. FINA sold its 51.000 par-value bonds for $1,070 and had to incur $20 flotation cost per bond. Preferred Stocks: 520 million, paying $15 dividends per share. FINA sold its preferred shares for $210 and had to incura $10/share flotation cost. Common Stocks: $200 million, the beta of FINA stocks is 1.5. the 90 day Treasury yield is 5%, and the return on the market portfolio is 15 %. FINA is subject to a 20% tax rate. Assuming the company uses WACC to compute the present value of the future cash flows, please find the following: 1) What is the after-tax cost of the loans? 2) What is the after-tax cost of the bonds? 3) What is the after-tax cost of preferred stock? 4) What is the after-tax cost of common stock? 5) What is the WACC? 6) What is the IRR? 7) What is the Payback Period? R1 What is the NDU? FINA's assets are $500 million, financed through bank loans, bonds, preferred stocks, and common stocks. The amounts are as follows: Bank loans: $ 100 million borrowed at 10% Bonds: 5180 million, paying 9% coupon with quarterly payments, and maturity of 5 years. FINA sold its $1,000 par-value bonds for $1,070 and had to incur $20 flotation cost per bond. Preferred Stocks: $20 million, paying $15 dividends per share. FINA sold its preferred shares for $210 and had to incur a $10/share flotation cost. Common Stocks: $200 million, the beta of FINA stocks is 1.5, the 90 day Treasury yield is 5%, and the return on the market portfolio is 15 %. FINA is subject to a 20% tax rate. Assuming the company uses WACC to compute the present value of the future cash flows, please find the following: 1) What is the after-tax cost of the loans? 2) What is the after-tax cost of the bonds? 3) What is the after-tax cost of preferred stock? 4) What is the after-tax cost of common stock? 5) What is the WACC? 6) What is the IRR? 7) What is the Payback Period? 8) What is the NPV? 9) Should FINA accept the project? According to IRR? According to the Payback period? According to NPV? 10) FINA is expected to pay a 54 per share common stock dividend at the end of this year. The dividends are expected to grow at 6% per year forever. How much should be the value of FINA's shares

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