hi. i need help with these questions:

Table 9.2

A firm has determined its optimal structure which is composed of the following sources and target market value proportions.

Source of capital Target Market Proportions

long-term debt 60%

Common stock equity 40

Debt:The firm can sell a 15-year, $1,000 par value, 8 percent bond for $1,026.

Common Stock:The firm's beta is 1.33, the market rate is 14% and the risk free rate is 5%.

Additionally, the firm has a marginal tax rate of 40 percent.

The firm's before-tax cost of debt is ________. (See Table 9.2)

a. 12.7%

b.10.6%

c. 7.7%

d. 11.2%

The firm's after-tax cost of debt is ________. (See Table 9.2

a. 7.7%

b. 7%

c. 6%

d. 4.6%

Based on the above infromation, the weighted average cost of capital is ________. (See Table 9.2)

a. 10.9%

b. 11.6%

c. 12.1%

d. 9.6%

The firm's cost of a new issue of common stock is ________. (See Table 9.2

a. 10.2%

b. 14.3%

c. 17%

d. 16.7%

Based on a market price of $50, how many shares should be sold?

a. 180,000

b. 300,000

c. 500,000

d. 120,000

Based on the market price of the bonds and current capital structure, how many bonds must be sold?

a. 23,384

b. 14,612

c. 14,620

d. 8,772

The firm in table 9.2 is considering investing in two projects with the following cash flows: Project A B Start Up $15,000,000 $25,000,0000 Years 1-5 $3,000,000 $2,000,000 Years 6-10 $2,000,000 $5,000,000 The NPV for Project A is:

a. $533.230

b.-$149,798

c.$128,691

d.$1,333,019

The IRR for Project A is a. 9.4%

b. 1.18%

c. 11.8%

d. 14.4%

Based on NPV, which project(s) should you accept

a. neither

b. both a and b

c. a only

d. b only

The NPV for project B is

a. $4,478,840

b. $44,768,408

c. $5,231,592

d. -$5,231,592

The IRR for Project B is

a. 5.42%

b. 11.8%

c. 0%

d. 9.4%

Based on IRR, which project(s) should you accept

a. b only

b. both a and b

c. a only

d. neither