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please help! please give the soecific answers MAKE SURE YOU COMPLETE ALL QUESTIONS WITHIN THIS PROBLEM. THERE ARE 14 DROPDOWN BOXES TO COMPLETE. You will
please help!
please give the soecific answers
MAKE SURE YOU COMPLETE ALL QUESTIONS WITHIN THIS PROBLEM. THERE ARE 14 DROPDOWN BOXES TO COMPLETE. You will receive partial credit for all correct answers. The Phillips Company is considering increasing its headphone production capacity to fulfill a large private contract. The CFO has tasked her finance staff to analyze the project and make a recommendation to the executive team to be included at next month's board meeting. The CFO provides the following information to the analyst: COST OF CAPITAL Phillips' current capital structure is comprised of $450,000,000 in debt, $300,000,000 in preferred equity, and $200,000,000 in common equity. Phillips currently has issued bonds that mature in 10 years with a coupon rate of 3% and a current market price of $845. Preferred shares of Phillips are trading at $16/ share and pay an annual dividend of $0.85/ share. Common stock of Phillips has a beta of 1.6 and trades at $60/ share. The 10 -year US treasury yield is 3.0%. The market risk premium is estimated at 9.25%. Their tax rate is 35%. Round answers to four decimal places (ie. 1125 or 11.25% ) - What is the current cost of Phillips debt capital? - What is the current cost of Phillips preferred equity capital? - What is the current cost of Phillips common equity capital (using CAPM)? - What is Phillips Weight Averaged Cost of Capital? Use your answers above and the information below to complete the remaining questions. PROJECT CASH FLOWS Philips expects to invest $26,000,000 in new/plant equipment. The contract will last for 10 years, at which point it expects its plant equipment to have a salvage value of $12,000,000. They plan to finance this project using 40% debt and 60% equity. Their investment banker advises there are transaction costs of 3.75% on debt and 11.0% on equity. Phillips expects to increase its accounts receivable by $7,500,000, its inventory by $3,000,000, and its accounts payable by $0,000,000. It expects to sell 50,000 units at a price of $315/ unit, with variable cost per unit of $200. It expects additional operating costs each year of $550,000. Phillips tax rate is 35%. - What is the annual depreciation for the fixed assets of this project? - What is the firm's weighted average flotation cost? (round to four decimal places) - What is the firm's flotation adjusted Initial Capital Expenditure? (round to nearest $100,000 ) - What is the projected Cash flow at Year 0? (round to nearest $100,000 ) - What is expected Cash flow Year 1-9? (round to nearest \$100,000) - What is the expected Cash Flow of Year 10 ? (round to nearest $100,000 ) - What is the project's Net Present Value? - What is the project's Internal Rate of Return? - What is Phillips Accounting Break-even unit sales level? - What is Phillips Cash Break-even unit sales level Step by Step Solution
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