Question
Question 4 Keys Printing plans to issue a $1,000 par value, 20-year noncallable bond with a 7.00% annual coupon, paid semiannually. The company's marginal tax
Question 4 Keys Printing plans to issue a $1,000 par value, 20-year noncallable bond with a 7.00% annual coupon, paid semiannually. The company's marginal tax rate is 40.00%, but Congress is considering a change in the corporate tax rate to 57.50%. By how much would the component cost of debt used to calculate the WACC change if the new tax rate was adopted?
Group of answer choices 1.48% 1.00% 1.23% 1.29% 1.25%
Question 5 Weston Refurbishing Inc. is considering a project that has the following cash flow data. What is the project's IRR? Year 0 1 2 3 4 Cash flows -$850 $300 $290 $280 $270
Group of answer choices 13.13% 14.44% 15.89% 17.48% 19.26% 12.29% 16.02% 11.07%
Question 6 You are analyzing the cost of capital for a firm that is financed with $500 million of equity and $350 million of debt. The after-tax cost of debt capital for the firm is 9 percent, while the after-tax cost of equity capital is 15 percent . What is the overall cost of capital for the firm?
Group of answer choices 12.53% 13.78% 11.47% 16.29%
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