Hasbro Inc (HAS) is considering a $16.2 million project that will last 20 years. The project's assets
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Hasbro Inc (HAS) is considering a $16.2 million project that will last 20 years. The project's assets are non-depreciable and will generate an EBIT of$3,100,000 per year. The firm's cost of unlevered equity is 14.8% and it faces a tax rate of 25%. Suppose the firm can obtain a 20 year non-amortizing loan of $14.6 million at its regular cost of debt of 6.7% to partially finance the project. Assume for simplicity that there are no flotation costs. What is the APV of the project under this debt scenario?
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0133400694
1st canadian edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford, David A. Stangeland, Andras Marosi
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