Please answer all the questions

1. CoCo Inc. plans to finance a new $32 million project and CoCo Inc. is operating at its target capital structure with market values of $110 million in equity and $175 million in debt outstanding. CoCo Inc. plans to finance a new $32 million project using the same relative weights of debt and equity. How much new debt must be issued to fund the project?

Select one: a. $19.6 million b. $24.8 million c. $18.5 million d. $26.8 million

2.Gillian's Boutique has 850,000 shares of common stock outstanding at a market price of $16 a share. The company also has 15,000 bonds outstanding that are quoted at 98 % of face value. What weight should be given to the common stock when Gillian's computes their weighted average cost of capital?

Select one: a. 49 % b. 48 % c. 51 % d. 50 %

3.The common stock of a firm is currently priced at $53 a share. The company paid $1.40 in common dividends last year and expects to increase this amount by 3% annually. The stock has a beta of 1.40, which is about equal to its industry average. Given this information, what is the cost of equity financing?

Select one: a. 5.72% b. 3.81% c. 8.01% d. 5.64%

4.A potential problem associated with the use of the dividend growth model to compute the cost of equity is that the estimated cost of equity is sensitive to the estimated dividend growth rate.

Select one: True False

5.As a means of determining a firm's cost of equity financing for an investment, a weakness in the dividend growth model is that it fails to specifically address the risk level of the investment.

Select one: True False

Pwi, [6/18/2022 11:37 PM] 6.As a means of determining a firm's cost of equity financing for an investment, a weakness in the dividend growth model is that the model can only be used by dividend-paying firms.

Select one: True False

7.For the purpose of estimating the firm's cost of debt for a project, one could observe the yield-to-maturity on recently issued bonds with a similar rating and term-to-maturity. Select one: True False

9.Ignoring taxes, if a firm issues debt at par, then the cost of debt is equal to its yield to maturity.

Select one: True False

10.The cost of equity is affected by the market risk premium.

Select one: True False