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Kentucky Hardware Company MHC) is considering an investment project that requires a new machine for produ t ools. This new machine costs $800,000 and will

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Kentucky Hardware Company MHC) is considering an investment project that requires a new machine for produ t ools. This new machine costs $800,000 and will be deprecated over five years on a straight-line basis toward zero salvage value HC paid a consulting company $60,000 to t hom decide whether there is sufficient demand for the special tools. In addition to the investment on the machine, KH invests $30,000 in networking capital H also has estimated performance of the new machine and believes that the new machine will produce $450,000 per year in sales, $200,000 per year in cost of goods sold, and $30.000 per year in ministrative expenses. The company pay $45.000 in interest annually and has average rate 35 In order to get an estimate of cost of capital, KHC colect the following information Debt 10,000 6.4% coupon bonds outstanding. $1.000 per value, 25 years to maturity, selling for 110.00% of par, the bonds make semiannus payments. Common stock 495,000 shares outstanding, selling for $63 por share the bota is 105 's most recent dividend was $273 per share, and dividends are expected to grow a med 5 ndefinitely Preferred stock 35,000 shares outstanding, selling for $72 per share the preferred stock dividend is 53.5 per share Market 8.8% market risk premium and 0.75% risk-free rate What is market value capital structure? a $28,957,780 b.551017.750 $38610000 d.544505.000

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