Question ? 1 pts Windman Corporation has preferred stock paying a $7 dividend, and semiannual bonds with a 9.0 percent coupon rate. The common stock currently sells for $34 per share and has a beta of 1.20; the preferred stock currently sells for $83 per share; and the bonds have 20 years to maturity and sell for $1345. Windman's historic equity risk premium is 4.5 percent. The expected return on the market is 10 percent, and Windman's tax rate is 35 percent. What is an estimate of Windman's cost of equity using Bond Yield plus Risk Premium? 14.3% 10.596 22.5% 3.5% Can't determine without knowing their dividend. Question 10 1 pts Triplex Corporation has 9 million shares of common stock outstanding: 500,000 shares of preferred stock paying a $7 dividend; and 120,000 semiannual bonds with an 8.5 percent coupon rate. The common stock currently sells for $34 per share and has a beta of 1.20, the preferred stock currently sells for $83 per share; and the bonds have 15 years to maturity and sell for $930. The market risk premium is 10 percent, T-bonds are yielding 5 percent, and Triplex's tax rate is 35 percent. What is Triplex's after-tax cost of debt? 10.18% 9.38% 6.10% 20.58% 4.06% Question 11 1 pts Consider a project with an initial investment and positive future cash flows. As the discount rate decreases: IRR increases while NPV remains constant IRR increases while NPV decreases IRR decreases while NPV remains constant IRR remains constant while NPV increases Question 12 1 pts Consider a cash flow stream corresponding to a capital budgeting project. What is the discount rate corresponding to NPV = 0? Payback period NPV Average accounting return profitability index IRR Question 13 1 pts Which of the following statements is CORRECT? If a project with normal cash flows has an IRR less than the required return, the project must have a positive NPV If the NPV is negative, the IRR must also be negative If Project A's IRR exceeds Project B's, then A must always have the higher NPV If a project with normal cash flows has an IRR greater than the required return, the project must also have a positive NPV Question 14 1 pts Which of the following is NOT a correct statement of a capital budgeting decision rule? if the calculated payback on a project is less than what a company requires, the project should be accepted If the required retum is greater than the IRR, the project should be accepted If the NPV of a project is positive, it should be accepted