What is an appropriate discount rate for the firms projects

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Reference no: EM131933876

1. Cougars R’ US Corp. sells WSU apparel. The company has a target Debt-Equity ratio of 0.35. They cost of Debt is 7% while the cost of equity is 14.5%. Using the WACC formula, what is an appropriate discount rate for the firms projects?

2. A ten-year bond with a $1,000 face value pays an annual coupon equivalent to a 7% rate. The market interest rate for the bond is 3%. What price would you expect to pay for the bond in the open market?

3. The renewal probability is assumed to be 60% for a particular lease with 12 months vacant if the lease is not renewed. The expected vacancy at the end of the lease is: (A)

(A) ?4.8 months

(B)? 7.2 months

(C)? 9.0 months

(D)? 12.0 months

Reference no: EM131933876

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