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Please help me answer questions 4,5, and 6! (4) Company BW has 50,000 shares outstanding and the market price is $23 per share. People believe
Please help me answer questions 4,5, and 6!
(4) Company BW has 50,000 shares outstanding and the market price is $23 per share. People believe this company is twice as risky as the stock market. Current T-bill rate is 3% and expected stock market return this year is 9%. What is BW's annual cost of equity? [15 points] (5) Find the overall (annual) cost of capital for BW (WACC). [20 points] (6) Company BW has the following two investment opportunities (A and B). a) Which project is better, according to NPV? [15 points] b) Which project is better, according to Modified IRR? [15 points] Let's not to consider the difference in the duration of these projects*** (4) Company BW has 50,000 shares outstanding and the market price is $23 per share. People believe this company is twice as risky as the stock market. Current T-bill rate is 3% and expected stock market return this year is 9%. What is BW's annual cost of equity? [15 points] (5) Find the overall (annual) cost of capital for BW (WACC). [20 points] (6) Company BW has the following two investment opportunities (A and B). a) Which project is better, according to NPV? [15 points] b) Which project is better, according to Modified IRR? [15 points] Let's not to consider the difference in the duration of these projects***Step by Step Solution
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