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Use the following information to answer the next five questions: Consider the after-tax cash flows below from a project that is being considered by Despondus
Use the following information to answer the next five questions: Consider the after-tax cash flows below from a project that is being considered by Despondus Corporation. Since the project is an extension of the firm's current business, it carries the same risk as the overall firm. Year 0 1 2 3 4 5 Cash Flow-$232,000 $98,000 $65,000 $101,000 $91,000 $105,000 Despondus Corporation's common stock is currently priced at $123.97, and there are 514,000,000 shares outstanding. A dividend of $3.18 per share was just paid, and dividends are expected to grow at a constant rate of 7% per year. The company has 12,530,000 bonds outstanding that mature in 29 years and are currently priced at $1,064 per bond. The coupon rate is 7.62%, and the bonds make semiannual interest payments. The company's tax rate is 38%. Question 22 2 pts What is Despondus Corporation's after-tax cost of debt? HTML Editor B 1 u A TX E x? x V TT 12pt Paragraph O words Question 23 2 pts What is Despondus Corporation's weighted average cost of capital (WACC)? Question 24 2 pts What is the net present value of the project? (Round to the nearest dollar.) HTML Editora B 1 IC A Ex? x : V TT 12pt Paragraph O words Question 25 2 pts Should the project be accepted? Explain your answer; a simple 'yes' or 'no' will result in no points for this part of the
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