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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

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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 of interest-bearing debt Coupon interest rate on debt 20 million $ 35 7.5% $330million 4.0 % $ 225million $ 370million 11.0% Market value of debt Book value of equity Cost of equity capital Tax rate 35% Burgundy is contemplating what for the company is an average- risk investment costing $30 million and promising an annual ATCF of $4.5 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

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