A firm has a target debt-equity ratio of .37. The cost of debt is 9% and the
Fantastic news! We've Found the answer you've been seeking!
Question:
A firm has a target debt-equity ratio of .37. The cost of debt is 9% and the cost of equity is 15%. The company has a 34% tax rate. A project has an initial cost of $70,000 and an annual after-tax cash flow of $21,000 for six years. There is no salvage value or net working capital requirement. What is the net present value of the project using the WACC?
A) $15,011B) $15,942C) $14,899D) $15,513E) $14,092
Posted Date: