Leave percentages with 1 decimal point. For the Proformas, you can leave as whole dollars. For the TMV and NPV problems, round to the nearest penny. Cells collored yellow are to be solved and cells colored green are to be filled in with information provided in the question You must show the excel formulas, not just the typed in value.
WACC Titan Corporation has 6.7 million shares of common stock outstanding and 120,000 5.3 percent semiannual bonds outstanding, with a par value $1,000 each. The common stock currently sells for $52.23 per share and has a beta of 1.15; the bonds have 25 years to maturity and sell for 102 percent of par. The market risk premium is 7.2 percent, T-bills are yielding 4.1 percent, and the company's tax rate is 21 percent. Input Area: Debt Bonds outstanding Settlement date Maturity date Annual coupon rate Coupons per year Bond price (\% of par) Par value (\$) Common stock Shares outstanding Beta Share price Market Market risk premium Risk-free rate Tax rate Part A: Calculate the Following: What is the NPV for a distribution center project with a cost of $50 million and expected aftertax cash flows of $12 million per year for 6 years? Use the WACC calculated above. You can leave the answer shortened (in millions). 30 Part A: Calculate the Following: Market value of debt Market value of equity Market value of firm % of Debt to Value % of Equity to Value b. For projects equally as risky as the firm itself, the WACC should be used as the discount Pretax cost of debt Aftertax cost of debt Cost of equity WACC Part B: Calculate the Following: What is the NPV for a distribution center project with a cost of $50 million and expected aftertax cash flows of $12 million per year for 6 years? Use the WACC calculated above. You can leave the answer shortened (in millions). Formula is =Y IELD (D13,D14,D15,D17,100,D16) and then convert to a percentage to 2 decimal points. WACC Titan Corporation has 6.7 million shares of common stock outstanding and 120,000 5.3 percent semiannual bonds outstanding, with a par value $1,000 each. The common stock currently sells for $52.23 per share and has a beta of 1.15; the bonds have 25 years to maturity and sell for 102 percent of par. The market risk premium is 7.2 percent, T-bills are yielding 4.1 percent, and the company's tax rate is 21 percent. Input Area: Debt Bonds outstanding Settlement date Maturity date Annual coupon rate Coupons per year Bond price (\% of par) Par value (\$) Common stock Shares outstanding Beta Share price Market Market risk premium Risk-free rate Tax rate Part A: Calculate the Following: What is the NPV for a distribution center project with a cost of $50 million and expected aftertax cash flows of $12 million per year for 6 years? Use the WACC calculated above. You can leave the answer shortened (in millions). 30 Part A: Calculate the Following: Market value of debt Market value of equity Market value of firm % of Debt to Value % of Equity to Value b. For projects equally as risky as the firm itself, the WACC should be used as the discount Pretax cost of debt Aftertax cost of debt Cost of equity WACC Part B: Calculate the Following: What is the NPV for a distribution center project with a cost of $50 million and expected aftertax cash flows of $12 million per year for 6 years? Use the WACC calculated above. You can leave the answer shortened (in millions). Formula is =Y IELD (D13,D14,D15,D17,100,D16) and then convert to a percentage to 2 decimal points
