Question
McCann Catching, Inc. has 2.00 million shares of stock outstanding. The stock currently sells for $12.77 per share. The firms debt is publicly traded and
McCann Catching, Inc. has 2.00 million shares of stock outstanding. The stock currently sells for $12.77 per share. The firms debt is publicly traded and was recently quoted at 90.00% of face value. It has a total face value of $13.00 million, and it is currently priced to yield 9.00%. The risk free rate is 2.00% and the market risk premium is 8.00%. Youve estimated that the firm has a beta of 1.24. The corporate tax rate is 39.00%. The firm is considering a $47.43 million expansion of their production facility. The project has the same risk as the firm overall and will earn $11.00 million per year for 6.00 years. What is the NPV of the expansion? (answer in terms of millions, so 1,000,000 would be 1.0000) Submit Answer format: Currency: Round to: 4 decimal places.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started