Question
This is a multipart question, can you please show the work on how you did the problems. 1.Cost of Debt: 30 year Bonds Current Price
This is a multipart question, can you please show the work on how you did the problems.
1.Cost of Debt: 30 year Bonds Current Price 101.5% of par value 7.6 % Coupon Rate Semi Annual Bond 5 years to maturity Tax Rate: 40% What is the Cost of Debt? After Tax?
2.Preferred Stock: Dividend $7.50 Current Price $60.00 What is the Cost of Preferred?
3.Equity: Risk Free Rate 6.50% Market Risk Premium 6.25% Stock Beta 0.7 What is the Cost of Equity?
4.Market Value...Debt/Equity 10,000 Bonds Outstanding Selling @ 101.5% of Par Value 43,000 Preferred Stock @ $60.00 300,000 Shares of Common Stock @ $40.00 per share
5.What is the WACC?
6.Given the WACC calculation the NPV for the following capital budget investment $400,000
cash flows: 1st year -55,000, 2nd year 65,000, 3rd year 75,000, 4th year 85,000, 5th year 150,000 (Accept or Reject the project?)
7.NPV is ?
8.Calculate payback
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