Question
PLEASE HELP ASAP 1. A firm has 10,000,000 shares of common stock outstanding, each with a market price of $15.00 per share. It has 80,000
PLEASE HELP ASAP
1. A firm has 10,000,000 shares of common stock outstanding, each with a market price of $15.00 per share. It has 80,000 bonds outstanding, each selling for $1020. The bonds mature in 15 years, have a coupon rate of 9%, and pay coupons semi-annually. The firm's equity has a beta of 1.9, and the expected market return is 10%. The tax rate is 30% and the risk-free rate is 4%. What is the WACC for the firm?
A) 12.1%
B) 13.9%
C) 14.5%
D) 15.4%
E) 16.2%
2. Your firm is considering a project which requires an initial investment of $2.75 million. Your target D/E ratio is 0.75. Flotation costs for equity are 7.15% and flotation costs for debt are 3.37%. What is the true cost (in dollars) of the project when you consider flotation costs?
A) $2.85 million
B) $2.91 million
C) $3.32 million
D) $3.46 million
E) $3.61 million
13- Increasing GDP growth and declining inflation are examples of:
I. Market Risk
II. Systematic Risk
III. Unsystematic Risk
IV. Diversifiable Risk
- I and II only
- I and III only
- II and IV only
- I, II and III only
- I, II, III and IV
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