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Use the following information to answer the next six questions. Note, there are only two source of funds for the firm - debt and common

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Use the following information to answer the next six questions. Note, there are only two source of funds for the firm - debt and common stock. Debt: 10000 bonds outstanding, maturity in 7 years, periodic (six-month) yield s 4%, annual coupon rate is 5% CS: One million shares outstanding, current market value is $20.00 per share, last annual dividend was $2.00 and the next dividend is expected to be $2.10 based upon the constant dividend growth model, the market risk premium is 7.0% and the risk-free rate is 3.5% What is the total market value of outstanding debt? What is the total market value of outstanding common stock? What is the expected rate of return on the common stock? Based upon the answer you obtained in the question above, what must beta be for the common stock? Given a corporate tax rate of 35%, what is the firm's WACC? Assuming that the firm has a project that is expected to return (IRR) 10%, should the firm take on the project? Explain briefly

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