Question
Please answer 25.Hamilton Company's 8 percent coupon rate, quarterly payment, $1,000 par value bond, which matures in 20 years, currently sells at a price of
Please answer
25.Hamilton Company's 8 percent coupon rate, quarterly payment, $1,000 par value bond, which matures in 20 years, currently sells at a price of $686.86.The company's tax rate is 40 percent.What is the firm's component cost of debt for purposes of calculating the WACC?
a.3.05%
b.7.32%
c.7.36%
d.12.20%
30.The Seattle Corporation has been presented with an investment opportunity that will yield cash flows of $30,000 per year in Years 1 through 4, $35,000 per year in Years 5 through 9, and $40,000 in Year 10.This investment will cost the firm $150,000 today, and the firm's cost of capital is 10 percent.Assume cash flows occur evenly during the year, 1/365th each day.What is the payback period for this investment?
a.5.23 years
b.4.86 years
c.4.00 years
d.6.12 years
31.Coughlin Motors is considering a project with the following expected cash flows:
Project
YearCash Flow
0-$700 million
1200 million
2370 million
3225 million
4700 million
The project's WACC is 10 percent.What is the project's discounted payback?
a.3.15 years
b.4.09 years
c.1.62 years
d.3.09 years
31.Coughlin Motors is considering a project with the following expected cash flows:
Project
YearCash Flow
0-$700 million
1200 million
2370 million
3225 million
4700 million
The project's WACC is 10 percent.What is the project's discounted payback?
a.3.15 years
b.4.09 years
c.1.62 years
d.3.09 years
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