You have the following information about the firm: 2,000,000 shares outstanding with market share price of $80 per share No preferred shares A total of 40,000 bonds with YTM=6%. All bonds mature 18 years from now and have the same annual coupon rate. A debt-to-equity ratio of D/E=1/3 A corporate tax rate of T=30% It is expected to pay $4 dividends next year and dividends are expected to grow at a constant rate. If it needs to issue new equity, it faces a flotation costs of F=15% Assume also that the risk-free interest rate is 5%, market expected rate of return is 14% and the firms beta is 0.6

Which of the following is the closest approximation to the projects IRR (since you may have to do many computations for this question, it may be useful to use Excel to save time)

A) 11% B) 21% C) 26% D) 31% E) 41%