You are an analyst for CofC Inc., and the CEO wants you to analyze the company's various financial aspects.

$1.$CofC Inc. currently has bonds with a $20-$year maturity and $4\mathrm{.}25\%$ quarterly coupon. The bond is currently trading at $$905\mathrm{.}19,$ based on daily compounding. What was the bond's yield to maturity? Is the bond trading at par, premium, or a discount?

$2.$ Given the risk$-$free rate is $4\%,$ the MRP is $6\%,$ the beta of CofC Inc is $0\mathrm{.}61.$ What is the expected return of CofC Inc's common stock.

$3.$ If CofC Inc is trading at $$50,$ but CofC Inc's first dividend payment, one year from now, is $$4\mathrm{.}15$ and expected to grow at $1\mathrm{.}1\%$ yearly. Using the discounted cash flow method, what is CofC Inc's required rate of return on their stock? If the risk premium of CofC Inc's stock is $-0\mathrm{.}75\%,$ what is the estimated cost of equity $($use $r_d$ from previous bond calculation$)?$

$5.$ Knowing the three most common ways to determine a stock's required rate of return, what is the average required rate of return of CofC Inc's stock?

CofC Inc also has preferred stock outstanding. It is currently trading at $$5.$ CofC Inc's preferred stock dividend payments are $$0\mathrm{.}39.$ What is the return on CofC Inc's preferred stock?

$7.$ CofC Inc's current capital structure includes $30\%$ debt and the rest in equity. The board of CofC Inc recently decided that its target capital structure should have $40\%$ debt, $20\%$ preferred stock, and the balance being common stock. The current corporate tax rate is $21\%.$ Calculate CofC Inc's WACC for both current and target capital structure. Which capital structure do you recommend to the board of CofC Inc?

$8.$ The project manager of CofC Inc wants you to analyze the feasibility of taking on a new project. The details of the project are below. The manager also took financial management and knows that there are $3$ main ways to evaluate whether you should accept or reject the project. Project the project's cash

flows and complete the analysis of the project's discounted payback period, IRR, and NPV$.$ What is your recommendation for the project and why?

SI Inc has an investment opportunity where the required initial investment on equipment is $$9,000.$ The firm will depreciate the equipment using $5-$year

MACRS over the three$-$year life of the project $($MACRS rates are $20\%,32\%,19\mathrm{.}2\%$ in years $1-3).$ The equipment can be sold at the end of the project life for $30\%$ of its purchase price. Sales is expected to be $$8,000$ each year and the variable costs are expected to be $40\%$ of the sales revenue each year. Fixed costs will be $$500$ each year. Interest expense will be $$600$ each year. The firm has already incurred $$1,800$ on the initial marketing feasibility study for this project. An investment in working capital of $$400$ is required at the start of the project. Subsequently, the total working capital investment will be $10\%$ of sales. Investment in working capital is fully recovered in the final year of the project. If the firm takes on this project, the cash flows from the firm's existing division will decrease by $$300$ each year. The firm's tax rate is $21\%.$