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What is the net present value of the project? (Round to the nearest dollar.) Please show all work! Use the following information to answer the
What is the net present value of the project? (Round to the nearest dollar.)
Please show all work!
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 -$452,000 $86,000 $67,000 $110,000 $93,000 $98,000 Despondus Corporation's common stock is currently priced at $46.77, and there are 753,000,000 shares outstanding. A dividend of $3.01 per share was just paid, and dividends are expected to grow at a constant rate of 6.69% per year. The company has 6,990,000 bonds outstanding that mature in 29 years and are currently priced at $949 per bond. The coupon rate is 12.21%, and the bonds make semiannual interest payments. The company's tax rate is 31%Step by Step Solution
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