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Your firms current capital structure is 30% Debt and 70% Equity. Your cost of Debt is 8%. Your firm currently has a Beta of 1.2,
Your firms current capital structure is 30% Debt and 70% Equity. Your cost of Debt is 8%. Your firm currently has a Beta of 1.2, but you consider this project riskier than your other projects and you have assigned it a Beta of 1.5. The current risk-free rate is 3.5% and the Market Risk Premium is 6%. Using this information, compute the Expected NPV of the project based on its WACC and marginal impact to the firms Cash Flow under the various scenarios.
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