The life of the project and has no salvage value

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1. Bill Inc. common stock is expected to pay a $2.02 dividend at the end of the year and is in a risk class that requires an 8.5% required return. If this dividend is expected to grow forever at a 3.2% rate, what is the estimated value of Bill Inc.’s common stock?

2. A 6-year project has an initial fixed asset investment of $12,180, an initial NWC investment of $1,160, and an annual OCF of -$18,560. The fixed asset is fully depreciated over the life of the project and has no salvage value. Required: If the required return is 14 percent, what is the project's equivalent annual cost, or EAC? (Do not round your intermediate calculations.)

Reference no: EM132038188

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