6) A company is trying to estimate the cost of debt for a new project. For their estimate, they will find the yield to maturity on existing company bonds. They have one outstanding bond issue at the moment that will mature in 15.00 years. The bond pays an annual coupon of 9.00%, with a face value of $1,000. The bond currently trades at 92.00% of face value.

a) What is the yield to maturity on the existing debt?

b)What coupon rate will the company have to place on new debt to sell near par value?

17) Georgia Movie Company has a capital structure with 43.00% debt and 57.00% equity. The cost of debt for the firm is 8.00%, while the cost of equity is 14.00%. The tax rate facing the firm is 35.00%.

The firm is considering opening a new theater chain in a local college town. The project is expected to cost $12.00 million to initiate in year 0. Georgia Movie expects cash flows in the first year to be $2.82 million, and it also expects cash flows from the movie operation to increase by 4.00% each year going forward. The company wants to examine the project over a 12.00-year period.

a) What is the WACC for this project?

b) What is the NPV of this project? (express answer in millions, so 1,000,000 would be 1.00)

23) A firm has a target capital structure of 39.00% debt and 61.00% equity. Currently, investors in the firm's debt want a 5.91% yield to maturity, while investors in the firm's equity have a required return of 11.46%. The marginal tax rate for the firm is 34.00%.

The firm has a project with the following cash flows:

YEAR 0 1 2 3 4

Cash Flow -$36,213.00 $10,957.00 14,024.00 15,987.00 11,500.00

What is the NPV of this project?