If possible, use Excel with cell references, please.

105 ABC Company has a target Debt Ratio of 50%. ABC has a debt issue outstanding that is currently trading at 91% of its par value of $1,000. The outstanding issue pays annual interest payments, has a coupon rate of 9.5%, 106 and 5 years remaining until maturity; new debt with a 30-year original maturity will incur an 8% flotation cost. Further, ABC's common stock trades currently at a price of $31.25 and the market expects ABC to pay a 107 dividend in one year of $4.00 (ABC just paid a dividend of $3.64, and this growth rate is expected to continue); ABC pays out all net income as dividends; and new equity will incur a 14% flotation cost. ABC's tax rate is 108 40%. 109 110 111 a. What is the YTM on ABC's existing debt? 112 113 b. What is ABC's before tax cost of debt? 114 115 c. What is ABC's after-tax cost of debt? 116 117 d. What is ABC's expected future growth rate? 118 119 e. What is ABC's cost of internal equity? 120 121 f. What is ABC's cost of external equity? 122 123 g. What is ABC's WACC with internal equity? 124 125 What is ABC's WACC with external equity? 126 126 127 ABC (from above) is currently evaluating two mutually exclusive projects. Project A has a time 0 equipment cost of $370,000 and is expected to return cash flows of $70,000 per year for the next 25 years. Project B has a 128 time 0 equipment cost of $590,000 and is expected to return cash flows of $110,000 per year for the next 25 years. 129 What is the IRR for project A? 130 a. 131 132 b. What is the IRR for project B? 133 134 c. What is the NPV for project A? 135 136 d. What is the NPV for project B? 137 138 e. Which project should ABC adopt? 139 140 f. Why? 105 ABC Company has a target Debt Ratio of 50%. ABC has a debt issue outstanding that is currently trading at 91% of its par value of $1,000. The outstanding issue pays annual interest payments, has a coupon rate of 9.5%, 106 and 5 years remaining until maturity; new debt with a 30-year original maturity will incur an 8% flotation cost. Further, ABC's common stock trades currently at a price of $31.25 and the market expects ABC to pay a 107 dividend in one year of $4.00 (ABC just paid a dividend of $3.64, and this growth rate is expected to continue); ABC pays out all net income as dividends; and new equity will incur a 14% flotation cost. ABC's tax rate is 108 40%. 109 110 111 a. What is the YTM on ABC's existing debt? 112 113 b. What is ABC's before tax cost of debt? 114 115 c. What is ABC's after-tax cost of debt? 116 117 d. What is ABC's expected future growth rate? 118 119 e. What is ABC's cost of internal equity? 120 121 f. What is ABC's cost of external equity? 122 123 g. What is ABC's WACC with internal equity? 124 125 What is ABC's WACC with external equity? 126 126 127 ABC (from above) is currently evaluating two mutually exclusive projects. Project A has a time 0 equipment cost of $370,000 and is expected to return cash flows of $70,000 per year for the next 25 years. Project B has a 128 time 0 equipment cost of $590,000 and is expected to return cash flows of $110,000 per year for the next 25 years. 129 What is the IRR for project A? 130 a. 131 132 b. What is the IRR for project B? 133 134 c. What is the NPV for project A? 135 136 d. What is the NPV for project B? 137 138 e. Which project should ABC adopt? 139 140 f. Why