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What is Despondus Corporation's after-tax cost of equity? What is the net present value of the project? (Round to the nearest dollar.) What is the
What is Despondus Corporation's after-tax cost of equity?
What is the net present value of the project? (Round to the nearest dollar.)
What is the net present value of the project? (Round to the nearest dollar.)
Year 4 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. 0 1 12 3 5 Cash Flow -$479,000 $103,000 $67,000 $107,000 $92,000 $102,000 Despondus Corporation's common stock is currently priced at $124.05, and there are 713,000,000 shares outstanding. A dividend of $4.16 per share was just paid, and dividends are expected to grow at a constant rate of 5.48% per year. The company has 8,120,000 bonds outstanding that mature in 15 years and are currently priced at $943 per bond. The coupon rate is 11.35%, and the bonds make semiannual interest payments. The company's tax rate is 33%Step by Step Solution
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