Question: CUBE Entertainment has a capital structure that is based on 4 0 percent debt, 5 percent preferred stock, and 5 5 percent common stock. The
CUBE Entertainment has a capital structure that is based on percent debt, percent preferred stock, and percent common stock. The pretax cost of debt is percent, the cost of preferred stock is percent, and the cost of common stock is percent. The tax rate is percent. A project is being considered that is equally as risky as the overall company. This project has initial costs of $ and annual cash inflows of $$ and $ over the next three years, respectively. Please calculate the WACC and NPV of this project, and describe your decision.
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