please answer the question
please answer question 10-1 based on all the information provided in these photos
has the touwing mement OPPORT nent opportunides that are average risk pred Project Cost att=0 CD 160 C 10,000 142 D 20,000 10,000 13.2 12.0 E sich projects should LEI accept? Why? Assume that LEI does not want to issue any new mmon stock. How would each of the following scenarios affect a firm's cost of debt, 1 (1 - T); its cost of equity, t, and its WACC? Indicate with a plus (+), a minus (-), or a zero (O) whether the factor would raise, lower, or have an indeterminate effect on the item in question. Assume for each answer that other things are held constant, even though in some instances this would probably not be true. Be prepared to justify your answer but recognize that sev- eral of the parts have no single correct answer. These questions are designed to stimulate thought and discussion has the touwing mement OPPORT nent opportunides that are average risk pred Project Cost att=0 CD 160 C 10,000 142 D 20,000 10,000 13.2 12.0 E sich projects should LEI accept? Why? Assume that LEI does not want to issue any new mmon stock. How would each of the following scenarios affect a firm's cost of debt, 1 (1 - T); its cost of equity, t, and its WACC? Indicate with a plus (+), a minus (-), or a zero (O) whether the factor would raise, lower, or have an indeterminate effect on the item in question. Assume for each answer that other things are held constant, even though in some instances this would probably not be true. Be prepared to justify your answer but recognize that sev- eral of the parts have no single correct answer. These questions are designed to stimulate thought and discussion LEI's expected net income this year is $34,285.72, its established dividend payout ratio is 30%, its federal-plus-state tax rate is 40%, and investors expect future earnings and divi- dends to grow at a constant rate of 9%. LEI paid a dividend of $3.60 per share last year, and its stock currently sells for $54.00 per share. LEI can obtain new capital in the following ways: (1) New preferred stock with a dividend of $11.00 can be sold to the public at a price of $95.00 per share. (2) Debt can be sold at an interest rate of 12%. a. Determine the cost of each capital component b. Calculate the WACC. c. LEI has the following investment opportunities that are average-risk projects: Rate of Return Project 17.4% 16.0 B Cost att = 0 $10,000 20,000 10,000 20,000 10,000 C 14.2 13.2 D E 12.0 Which projects should LEI accept? Why? Assume that LEI does not want to issue any new common stock ns 10-1 How would each of the following scenarios affect a firm's cost of debt, r, (1 - 1); its cost of equity, r; and its WACC? Indicate with a plus (+), a minus (-), or a zero (0) whether the factor would raise, lower, or have an indeterminate effect on the item in question. Assume for each answer that other things are held constant, even though in some instances this would probably not be true. Be prepared to justify your answer but recognize that sev- eral of the parts have no single correct answer. These questions are designed to stimulate thought and discussion has the touwing mement OPPORT nent opportunides that are average risk pred Project Cost att=0 CD 160 C 10,000 142 D 20,000 10,000 13.2 12.0 E sich projects should LEI accept? Why? Assume that LEI does not want to issue any new mmon stock. How would each of the following scenarios affect a firm's cost of debt, 1 (1 - T); its cost of equity, t, and its WACC? Indicate with a plus (+), a minus (-), or a zero (O) whether the factor would raise, lower, or have an indeterminate effect on the item in question. Assume for each answer that other things are held constant, even though in some instances this would probably not be true. Be prepared to justify your answer but recognize that sev- eral of the parts have no single correct answer. These questions are designed to stimulate thought and discussion has the touwing mement OPPORT nent opportunides that are average risk pred Project Cost att=0 CD 160 C 10,000 142 D 20,000 10,000 13.2 12.0 E sich projects should LEI accept? Why? Assume that LEI does not want to issue any new mmon stock. How would each of the following scenarios affect a firm's cost of debt, 1 (1 - T); its cost of equity, t, and its WACC? Indicate with a plus (+), a minus (-), or a zero (O) whether the factor would raise, lower, or have an indeterminate effect on the item in question. Assume for each answer that other things are held constant, even though in some instances this would probably not be true. Be prepared to justify your answer but recognize that sev- eral of the parts have no single correct answer. These questions are designed to stimulate thought and discussion LEI's expected net income this year is $34,285.72, its established dividend payout ratio is 30%, its federal-plus-state tax rate is 40%, and investors expect future earnings and divi- dends to grow at a constant rate of 9%. LEI paid a dividend of $3.60 per share last year, and its stock currently sells for $54.00 per share. LEI can obtain new capital in the following ways: (1) New preferred stock with a dividend of $11.00 can be sold to the public at a price of $95.00 per share. (2) Debt can be sold at an interest rate of 12%. a. Determine the cost of each capital component b. Calculate the WACC. c. LEI has the following investment opportunities that are average-risk projects: Rate of Return Project 17.4% 16.0 B Cost att = 0 $10,000 20,000 10,000 20,000 10,000 C 14.2 13.2 D E 12.0 Which projects should LEI accept? Why? Assume that LEI does not want to issue any new common stock ns 10-1 How would each of the following scenarios affect a firm's cost of debt, r, (1 - 1); its cost of equity, r; and its WACC? Indicate with a plus (+), a minus (-), or a zero (0) whether the factor would raise, lower, or have an indeterminate effect on the item in question. Assume for each answer that other things are held constant, even though in some instances this would probably not be true. Be prepared to justify your answer but recognize that sev- eral of the parts have no single correct answer. These questions are designed to stimulate thought and discussion
