Project with estimated net present value

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1. A company has a project with an estimated net present value (NPV) of $567,000. The project has an 11% cost of capital, which is also used as the hurdle rate for the IRR rule. Determine whether the internal rate of return (IRR) of the project will be greater than, equal to, or less than 11% and explain why. Assume that there is a unique value of IRR.

2. The stock of Physicians Care Network (PCN) has a beta of 2.0. Assume that the risk-free rate is 4% and the market risk premium is 6%. PCN paid last dividend of $1.80 and the stock is currently traded at $19.80. What is the estimated growth rate?

Reference no: EM131883943

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