What is the projected net present value of project

Assignment Help Financial Management
Reference no: EM131558819

R.S. Green has 250,000 shares of common stock outstanding at a market price of $28 a share. Next year's annual dividend is expected to be $1.55 a share. The dividend growth rate is 2 percent. The firm also has 7,500 bonds outstanding with a face value of $1,000 per bond. The bonds carry a 7 percent coupon, pay interest semi-annually, and mature in 7.5 years. The bonds are selling at 98 percent of face value. The company's tax rate is 34 percent. The company is considering a project that has initial costs of $325,000 and annual cash inflows of $87,000, $279,000, and $116,000 over the next three years, respectively. Given the above information, what is the projected net present value of this project?

Reference no: EM131558819

Questions Cloud

Estimate of wacc for your computer sales division : What is an estimate of the WACC for your computer sales division? what is an estimate of the WACC for your software division?
Negotiating lease for tractors with leasing international : Fresh Farming Company is negotiating lease for five tractors with Leasing International. What would be Fresh Farming’s present value of leasing the tractors?
About creating great solution and hoping the market adopts : The most fundamental idea of a startup is not about creating a great solution and hoping the market adopts it.
What is the yield to maturity for the two-year bond : Based on the above information, what is the yield to maturity for the two-year bond if held to maturity?
What is the projected net present value of project : R.S. Green has 250,000 shares of common stock outstanding at a market price of $28 a share. what is the projected net present value of this project?
Respect to an unpredictable event will drift for while : In an efficient market, any abnormal returns with respect to an unpredictable event will drift for a while.
Develop software for gaming applications : Starware Software was founded last year to develop software for gaming applications. The venture capitalist will receive nothing million shares.
Company own sales force versus independent sales agents : What are the pros and cons of using a company's own sales force versus independent sales agents?
Inefficient market advocates argue : Inefficient market advocates argue that. Inefficient market advocates, the pattern on size portfolio returns is believed to be.

Reviews

Write a Review

Financial Management Questions & Answers

  Cross-border acquisitions over greenfield investments

Which of yhe following is NOT an advantage of cross-border acquisitions over greenfield investments?

  Expected return of the portfolio

Stock C has an expected return of 10% and standard deviation of 25%. Stock D has expected return of 14% and standard deviation of 32%. Seventy-five percent of the portfolio is invested in C and the rest is invested in D. What is the expected return o..

  Which of the given alternative should be chosen

BC Minerals's weighted cost of capital is 12 percent. Using the equivalent annual annuity method, which alternative should be chosen?

  Define the portfolio return

if rbc's stock goes up to $94 per share and td's stock falls to $72 per share, what is your portfolio return?

  Elements of policy such as interest credits-mortality charge

Because they are not reported separately, elements of the policy such as interest credits, mortality charges, and death benefits are difficult to track. Universal life allows policyowners to participate in favorable investment, mortality and expense ..

  Efficient market hypotheses

Of the following efficient market hypotheses, which one has research generally indicated is not correct? 1. weak 2. Semi Strong 3. strong 4. two of the options

  What is the balance on the ram at the time

What is the balance on the RAM at the time when this loan becomes due?

  What is present value of your retirement plan

what is the present value of your retirement plan if the discount rate is 4%?

  Using triangle arbitrage

The exchange rates in New York for $1 are C$1.112 and £0.8309. A dealer is offering the following quote: C$1 will buy £0.8922. What is the profit you can earn on $13,160 using triangle arbitrage?

  What was total real return on investment

If the inflation rate was 3.4 percent over the past year, what was your total real return on investment?

  Adding a robotic paint sprayer to its production line

The Campbell Company is considering adding a robotic paint sprayer to its production line.

  What is the bonds annual coupon rate

What is the bonds (nominal) annual coupon rate?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd