Calculate the after-tax return on the securities

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Reference no: EM132063420

1. Calculate the after-tax return on the following securities for a company that is in the 30% federal tax bracket. Assume the tax rate on dividends is 15%.

Treasury bonds at 5%

Corporate bonds at 8.25%

Municipal bonds at 7%

Preferred stock at 6.5%

2. A project has an initial cost of $40,000, expected net cash inflows of $9,000 per year for 7 years, and a cost of capital of 11%. What is the project’s NPV? (Hint: Begin by constructing a time line.)

(10-2) Refer to Problem 10-1. What is the project’s IRR?

(10-3) Refer to Problem 10-1. What is the project’s MIRR?

(10-4) Refer to Problem 10-1. What is the project’s PI?

(10-5) Refer to Problem 10-1. What is the project’s payback period?

(10-6) Refer to Problem 10-1. What is the project’s discounted payback period?

Reference no: EM132063420

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