The following is information for Clorox. Please use the following information to answer question 11-24. Clorox wants to pursue a project that will broaden the markets in which they currently participate. The new project is expected to generate a return of 3.78% WACC you need to compare the WACC with this return to make a decision on whether not to accept the project). They want to know what they should use for a capital). Your job is to perform the WACC calculations and advise them as to whether they should invest in this new project or not You get the following from their accountant Common stock is selling for $135 a share. The current annual dividend is 53.2 and the dividend growth rate is expected to be 3.2% a year. The stock's beta is 0. Preferred stock sells for $148 and pays an annual dividend of $15. There are currently 15 years callable, 3% coupon bonds available with the yied to matarity (YTM) of 3.05% There are 20 year, non-callable 6% coupon bonds with the yield to maturity (YTM) of 4.84%. There are 5 year 7% coupon bonds with the yield to maturity (YTM) of 2.15% The bond-yield risk premium is 3% The current risk-free rate is 5% and the market risk premium is 78%. (Hint: this as for using CAPM model) Clorot has a target capital structure of 20% debt, 7% preferred stock and 73% common equity and its current tax rate us 34% When alt What is the (simple) average of the 3 above calculated costs of common equity values. Use this average as the eventual cost of common equity for Clorox. 5.83 8.6.73% C 5.76 0.8.424 What is the WACC for Clorox? (rounded to two decimal places, pick the closest one)? Hint: The formula for WACC Id the following WACC=ward(1 T) - Wpp - Wels A 5.93 B.5.60 C. 6.594 D. 7.894 QUESTION 24 Should this project be undertaken? O Ares OBNO The following is information for Clorox. Please use the following information to answer question 11-24. Clorox wants to pursue a project that will broaden the markets in which they currently participate. The new project is expected to generate a return of 3.78% WACC you need to compare the WACC with this return to make a decision on whether not to accept the project). They want to know what they should use for a capital). Your job is to perform the WACC calculations and advise them as to whether they should invest in this new project or not You get the following from their accountant Common stock is selling for $135 a share. The current annual dividend is 53.2 and the dividend growth rate is expected to be 3.2% a year. The stock's beta is 0. Preferred stock sells for $148 and pays an annual dividend of $15. There are currently 15 years callable, 3% coupon bonds available with the yied to matarity (YTM) of 3.05% There are 20 year, non-callable 6% coupon bonds with the yield to maturity (YTM) of 4.84%. There are 5 year 7% coupon bonds with the yield to maturity (YTM) of 2.15% The bond-yield risk premium is 3% The current risk-free rate is 5% and the market risk premium is 78%. (Hint: this as for using CAPM model) Clorot has a target capital structure of 20% debt, 7% preferred stock and 73% common equity and its current tax rate us 34% When alt What is the (simple) average of the 3 above calculated costs of common equity values. Use this average as the eventual cost of common equity for Clorox. 5.83 8.6.73% C 5.76 0.8.424 What is the WACC for Clorox? (rounded to two decimal places, pick the closest one)? Hint: The formula for WACC Id the following WACC=ward(1 T) - Wpp - Wels A 5.93 B.5.60 C. 6.594 D. 7.894 QUESTION 24 Should this project be undertaken? O Ares OBNO