The firm''s cost of common equity issue

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1) Anderson Systems is considering a project that has the following cash flow and WACC data.

(a) What is the project's NPV? Note that if a project's expected NPV is negative, it should be rejected.

(b) What is the project's IRR?

(c) What is the project's Payback Period?

(d) What is the project's Discounted Payback Period?

2) Tuttle Enterprises is considering a project that has the following cash flow and WACC data.

(a) What is the project's NPV? Note that if a project's expected NPV is negative, it should be rejected.

(b) What is the project's IRR?

(c) What is the project's Payback Period?

(d) What is the project's Discounted Payback Period?

3) XYZ Inc. has the following data: rRF = 4.00%; RPM = 5.50%; and b = 0.95. What is the firm's cost of common equity?

4) ABC Co.'s perpetual preferred stock sells for $97.50 per share, and it pays an $8.50 annual dividend. Now the company were to sell a new preferred issue, with a flotation cost of 5.00% of the price paid by investors. What is the company's cost of preferred stock for use in calculating the WACC?

Reference no: EM13791778

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