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please answer all questions Time left 0:47:43 The current total market value of RRT Co. is $10 million. The firm plans to raise and invest
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Time left 0:47:43 The current total market value of RRT Co. is $10 million. The firm plans to raise and invest $5 million in a new project. Compared to the risks of the firm's existing assets, the project is about average-risk. The firm's present market value capital structure, shown below, is considered optimal. There is no short-term debt and preferred stock. The firm intends to finance the new project in a way that maintains the capital structure. Debt: $4 million Equity: $6 million The firm will issue new bonds and common stocks to finance the project. The bonds will have a coupon rate of 12% and are expected to be issued at par. The current stock price per share is $25. Assume the stock is priced in equilibrium. The firm just paid a dividend of $2 per share for the quarter. The dividend is expected to grow at 8% per year. The floatation cost for new stock issuance is 5%. The corporate tax rate is 40%. What is the WACC for the project? Select one: O a. 3281 O b. 2951 O c. 2345 O d. 2612 What is the discounted payback of the following project? WACC for 10.00% the project: Year 0 2 Cash flows -$900 $500 $500 3 $500 Select one: O a. 1.76 years O b. 3.02 years O c. 2.58 years O d. 2.09 years The possible EBITs for the coming year are $300, $350, and $400 with the probabilities 20%, 40%, and 40% respective The interest payment is $90 and the corporate tax rate is 10%. There are 50 cominon shares outstanding. What is the standard deviation of EPS? Time loft 0 Select one: O a. 5112 Ob..6322 O c. 3412 O d. .4490 What is the MIRR of the following project? 1 2 3 ear 0 cash flows -$1,000 ACCcomp=12% $400 $500 $400 lect one: a. 12.02% b. 13.49% C. 11.00% . 14.58% You obtain the following information for the IYR common stock: Quarterly dividend 5 years ago=1.0 Quarterly dividend just paid = 1.276 Po = 30.0 Assuming that the stock is priced in equilibrium, what is IYR's cost of common stock? Select one: O a. 16.44% O b. 14.71% O c. 22.86% O d. 18.93% e. 20.65% Step by Step Solution
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