SPC uses only debt and equity It can borrow unlimited at an interest rate of 12 , as long as it finances at its target capital structure, which calls for 45 debt and 55 equity Its last dividend was $2 40, its expected constant growth rate is 5 , and its stock sells for $24 SPCs tax rate is 40 Four projects are available Project A Cost $250 million and Return 13 Project B Cost $125 million and Return 12 Project C Cost $200 million and Return 11 Project D Cost $150 million and Return 10 What is SPCs cost of common stock Hint d1 Po g A) 5 B) 10 C) 15 D) 15 5 E) 5 15 What would be the optimal capital budget for SPC A) $250 B) $375 C)$200 D) $350 E) $150

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SPC uses only debt and equity  It can borrow unlimited at an interest rate of 12 , as long as it finances at its target capital structure, which calls for 45  debt and 55  equity  Its last dividend was $2 40, its expected constant growth rate is 5 , and its stock sells for $24  SPCs tax rate is 40   Four projects are available  Project A  Cost $250 million and Return 13  Project B  Cost $125 million and Return 12  Project C  Cost $200 million and Return 11  Project D  Cost $150 million and Return 10  What is SPCs cost of common stock  Hint d1 Po   g A) 5  B) 10  C) 15  D) 15 5  E) 5 15  What would be the optimal capital budget for SPC  A) $250 B) $375 C)$200 D) $350 E) $150

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SPC uses only debt and equity. It can borrow unlimited at an interest rate of 12%, as long as it finances at its target capital

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