Phillips' current capital structure is comprised of $100,000,000 in debt, $200,000,000 in preferred equity, and $800,000,000 in common equity. Phillins currently has issued bonds that mature in 10 years with a coupon rate of 8.85% and a current market price of $977. Preferred shares of Phillips are trading at $54/ share and pay an annual dividend of $2.65/ share. Common stock of Phillips has a beta of 0.8 and trades at $22/ share. The 10 -year US treasury yield is 2.65%. The market risk premium is estimated at 10.35%. Their tax rate is 30%. Round answers to four decimal places (ie. 1125 or 11.25% ) - What is the current cost of Phillips debt capital? - What is the current cost of Phillips preferred equity capital? - What is the current cost of Phillips common equity capital (using CAPM)? - What is Phillips Weight Averaged Cost of Capital? Use your answers above and the information below to complete the remaining questions. Philips expects to invest $16,700,000 in new/plant equipment. The contract will last for 10 years, at which point it expects its plant equipment to have a salvage value of $5,000,000. They plan to finance this project using 40% debt and 60% equity. Their investment banker advises there are transaction costs of 3% on debt and 12% on equity. Phillips expects to increase its accounts receivable by $5,000,000, its inventory by $3,000,000, and its accounts payable by $2,000,000. It expects to sell 45,000 units at a price of $290 /unit, with variable cost per unit of $180. It expects additional operating costs each year of $950,000. Phillips tax rate is 30%. - What is the annual depreciation for the fixed assets of this project? - What is the firm's weighted average flotation cost? (round to four decimal places) - What is the firm's flotation adjusted Initial Capital Expenditure? (round to nearest $100,000 ) - What is the projected Cash flow at Year 0? (round to nearest $100,000 ) - What is expected Cash flow Year 1-9? (round to nearest \$100,000) - What is the expected Cash Flow of Year 10 ? (round to nearest $100,000 ) - What is the project's Net Present Value? -What is the project's Internal Rate of Return? - What is the firm's weighted average flotation cost? (round to four decimal places) - What is the firm's flotation adjusted Initial Capital Expenditure? (round to nearest $100,000 ) - What is the projected Cash flow at Year 0? (round to nearest $100,000 ) - What is expected Cash flow Year 1-9? (round to nearest $100,000 ) - What is the expected Cash Flow of Year 10 ? (round to nearest $100,000 )