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XYZ Corp. has 15 million shares of common stock outstanding. The common stock currently sells for $60 per share and has a beta of 2.

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XYZ Corp. has 15 million shares of common stock outstanding. The common stock currently sells for $60 per share and has a beta of 2. XYZ Corp. has 290.000 bonds outstanding and sell for 110% of par value. The ytn (yield to inaturity) of the bond is 6% p.a. The market risk premium is 7%. T-bills are yielding 4%p.a and corporate tax rate is 25%. All p.a. rates are EAR What is the firm's market value capital structure (i.e. Market value of debt/Market value of equity)? What is the firm's cost of capital? If XYZ Corp. is evaluating a new investment project that has an investment of $50 million at year 0 and is expected to have a cash flow of $20 million from Year 1 onwards growing at the rate of 5% p.a. forever, what is the NPV of the project

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