Please answer only if you know thumbs up. Your firm has a cost...
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Your firm has a cost of equity of 12 percent, a cost of preferred of 9 percent, and a pre-tax cost of debt of 8.5 percent. Your target capital structure is 35 percent equity, 15 percent preferred stock and 50 percent debt. The firm has a beta of 1.2 and a tax rate of 34 percent. What is your firm's weighted average cost of capital? 15 Marks) You are analysing a project and have prepared the following data: Year Cash flows -$175,000 $ 50.000 $ 75,000 $ 95,000 $ 15,000 Required payback period 3 years Required rate of return 5% You are required to: a) Determine the project's Profitability Index, Internal Rate of Return, NPV and Discounted Payback Period [40 Marks! b) Decide whether accept the project based on the above investment decision criteria? S Marks]
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