Edited: To add missing information.

#6 Google currently has a 5 million common shares outstanding, and a 1 million preferred shares outstanding, and 100,000 bonds outstanding. Use your answers in #3, #4, and #5 to calculate Google Weighted Average Cost of Capital (WACC) if the corporate tax rate is 35%.

Needed information for #6

#3 = As a financial analyst, you know that both DGM and the CAPM used in # 1 and # 2 above can be inaccurate, so you decided to calculate the average cost of equity of google. What is the average cost of equity of Google?

Ans: 13.76%

#4 =Google has a preferred stock that pays an annual dividend of 6$ to shareholders. What is the cost of Googles preferred stocks if it is currently priced at $100?

Ans: 6%

#5 = Google has one bond outstanding that matures in 20 years. This bond has a coupon rate of 8%, paid semiannually. The bond currently sells for $1,124. What is the pre-tax cost of debt of Google?

Ans: 3.43%

End of needed information for #6

And then it builds off this question.

Motorola Mobility LLC is a company that develops mobile devices. Headquartered in Chicago, Illinois, United States, the company was formed on January 4, 2011 by the split of Motorola Inc. into two separate companies; Motorola Mobility took on the company's consumer-oriented product lines, including its mobile phone business and its cable modems and set-top boxes for digital cable and satellite television services, while Motorola Solutions retained the company's enterprise-oriented product lines. Early 2012, Google decided to purchase Motorola mobility LLC for $12.5b. Google had a plan to keep Motorola mobility for 5 years. Google financial analysis team made the following forecasts:

Year	Cash flow(in billions)	Net income (in billions)
2012	1.5	1
2013	2.5	2
2014	4	3
2015	3	2
2016	6 (includes 3.5b selling price)	1.5

And that the average book value of asset is $8b and Googles required rate of return is its WACC.

-Calculate net present value (NPV) for the above investment decision. Would you accept or reject this investment decision? Why?

-Calculate payback period. If you know that google accepts projects with 4 years payback period. Would you accept that project?

-Calculate the Motorola project internal rate of return (IRR). Would you accept or reject this project? Why?

Please show work so I can better understand it, preferably in excel. Thanks!

Questions 1 &2 below are just posted as a reference. They don't need to be answered.

1- In the previous 5 years, Google paid an annual dividend as follows:

Year	Dividends
2011	2.7
2010	2.5
2009	2.2
2008	1.8
2007	1.5

Google is expected to pay a dividends of $3 in the next year (2012). What is the cost of equity of Google if its current stock price is $90?

2- As a technology-based firm, Google has a high beta of 1.4. if the risk-free rate of return is 5% and the market risk premium is 3%, calculate the cost of equity of Google using the capital asset pricing model (CAPM)?