• risk free rate: 1.75%
• expected rate of return for the market: 9.5%
• Beta of VZ: 0.88
• VZ total debt, interest and shares issued can be found in VZ financial statements
• assume market value of all debt is 100% of face(par) value.
• tax rate is 20%
• VZ stock price: $55
• initial investment: 4,500,000

• year 1 cash flow: 1,100,000
• year 2 cash flow: 1,200,000
• year 3 cash flow: 1,350,000
• year 4 cash flow: 1,550,000
• year 5 cash flow: 1,750,000

1. Cost of equity?

2. After tax cost of debt?

3. Weighted average cost of capital (WACC) ?

4. Net present value of the investment (NPV) ?

5. Internal rate of return of the investment (IRR)?