Solution-Compare the wacc for the hong kong project with

Compare the wacc for the hong kong project with the wacc

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Reference no: EM13882210

Historically, Hong Kong has imported over 95% of its fresh vegetables each day. In an effort to develop sustainable and renewable vegetable sources, a new commercial vertical crop technology is being installed through a public-private partnership with Valcent Products. 1 For Valcent Announces Agreement to Supply Verticrop^TM Vertical Farming Technology to Hong Kong's VF Innovations Ltd.," www.valcent.net, June 16, 2010 news release.

Illustration purposes, assume that the present worth of the total system cost is $20 million with financing sources and costs as follows.

Commercial loan for debt financing	$10 million at 6.8% per year
Retained earnings from partnering corporations	$4 million at 5.2% per year
Sale of stock (common and preferred)	$6 million at 5.9% per year

There are three existing international vertical farming projects with capitalization and WACC values as follows:

Project 1:	$5 million with WACC 1 7.9%
Project 2:	$30 million with WACC 2 10.2%
Project 3:	$7 million with WACC 3 4.8%

Compare the WACC for the Hong Kong (HK) project with the WACC of the existing projects.

Reference no: EM13882210

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Compare the wacc for the hong kong project with the wacc

Reference no: EM13882210

Reference no: EM13882210

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