Reference no: EM131345322
1. NCC Corporation is considering building a new facility in Texas. To raise money for the capital projects, the corporation plans the following capital structure: 30% of money will come from issuing bonds, and 70% will come from Retained Earnings or new common stock.
The corporation does not currently have preferred stock.
NCC Corporation will issue bonds with an interest rate of 8% up to $30 million dollars in bonds.
After issuing $30 million in bonds, the interest cost will rise to 12.5%.
The next dividend on common stock is expected to be $2.00 per share.
The stock price is $25.00 per share, and is expected to grow at 3% per year. The flotation cost for issuing new common stock is estimated at 10%.
NCC Corporation has $66 million in retained earnings that can be used.
The tax rate for NCC Corporation is 35%.
1. What is the initial Weighed Average Cost of Capital (WACC) for NCC Corporation?
2. There are two breakpoints in NCC's capital structure. At what point does the first breakpoint occur?
3. At what point does the second breakpoint occur?
4. What is the Weighted Average Cost of Capital (WACC) after the first breakpoint?
5. What is the WACC after the second breakpoint?
6. The following projects are available for NCC Corporation to consider choosing.
Cost
Cash Flows Each Year
IRR
Project A
$25 Million
$7 Million for 5 years
12.38%
Project B
$50 Million
$15 Million for 5 years
15.24%
Project C
$30 Million
$7.5 Million for 6 years
13%
Project D
$30 Million
$8.8 Million for 5 years
14.29%
Project E
$40 Million
$11 Million for 5 years
11.65%
Which projects should NCC accept, if any, and in which order should they be chosen?
|
Design the interface circuit in given figure
: Design the interface circuit in given Figure so that 15 mW is delivered to the 100-Ω load. Repeat for a 100-kΩ load. Verify your designs using Multisim.
|
|
What is taxpayers correct and most favorable filing status
: Bill (6), their son, lived with Carol the entire year. Carol has waived her right to Bill's exemption for 2015 by signing Form 8332. What is the taxpayer's correct and most favorable 2015 filing status?
|
|
What was hasans motivation for the attack
: The U.S. Government insists this was a "workplace" violence, but based on Hasan's past many people believe he self-radicalized through his contacts with known radical Islamists, specifically the late Imam Anwar al-Awlaki (who has since been killed..
|
|
Explain the positions a conservative politician
: Explain the positions a conservative politician or commentator, and a liberal politician would take on the policy. Address anything they might have in common ideologically and also describe their differences.
|
|
At what point does the second breakpoint occur
: At what point does the second breakpoint occur? What is the Weighted Average Cost of Capital (WACC) after the first breakpoint? What is the WACC after the second breakpoint?
|
|
Nature versus nurture
: What is your position on the "nature versus nurture" (biology or culture) debate? What materials in this chapter support your position?
|
|
Discuss the five periods of juvenile justice history
: Identify and discuss the five periods of juvenile justice history and which period you think was the most influential to the evolution of the juvenile justice system.
|
|
Local and global communities
: Use the Internet to research the population of your community or town. City-Data, is a great Website to get you started. Identify whether you town is growing or declining. Describe at least one (1) sociological aspect that can be attributed to thi..
|
|
What is the dacs output
: An R-2R DAC is shown in given Figure. The digital voltages v1, v2, etc., can be either 5 V for a logic 1 or 0 V for a logic 0. What is the DAC's output when the logic input is (0, 1, 0 1)?
|