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You have the following information about Burgundy Basins, a sink manufacturer. Equity shares outstanding Stock price per share Yield to maturity on debt Book value
You have the following information about Burgundy Basins, a sink manufacturer. Equity shares outstanding Stock price per share Yield to maturity on debt Book value of interest-bearing debt Coupon interest rate on debt Market value of debt Book value of equity Cost of equity capital Tax rate 20 million $ 31 6.5% $ 310 million 3.6% $ 205 million $ 330 million 10.2% 35% Burgundy is contemplating what for the company is an average-risk investment costing $22 million and promising an annual ATCF of $4.1 million in perpetuity. a. What is the internal rate of return on the investment? (Round your answer to 2 decimal places.) Internal rate of return : % b. What is Burgundy's weighted average cost of capital? (Round your answer to 2 decimal places.) Weighted-average cost % 6
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