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The table below shows the NPV and IRR for the three projects - A , B and C . The opportunity cost of capital for
The table below shows the NPV and IRR for the three projects A B and C The
opportunity cost of capital for the three projects is Assuming the projects are
mutually exclusive, which project would be economically feasible and why? marks
Project A Project B Project C
NPV
IRR
b Describe the two main ways in which a firm can return cash to shareholders. Describe
some potential considerations for a firm when deciding on its dividend policy.
marks
c A firm is expected to pay share in dividends next year. Those dividends are
expected to grow by for the next three years and thereafter. If the discount
rate is what is the current price of this security? Solve all questions please.
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