Question: i need a detailed, step by step solution for both problem 3 and 4 pleaase.. thank you Problem 3 (12 marks) CAPITAL Partners has a

 i need a detailed, step by step solution for both problem
3 and 4 pleaase.. thank you Problem 3 (12 marks) CAPITAL Partners
i need a detailed, step by step solution for both problem 3 and 4 pleaase.. thank you

Problem 3 (12 marks) CAPITAL Partners has a beta of 1.1. The 3-month Treasury bill rate is 3%. The market risk premium is equal to 6%. The company wishes to fund a project through shares and bonds. 35% of funding came from bonds and the rest from shares. The marginal tax rate is equal to 15%. The yield to maturity on the bonds is equal to 7%. a. Calculate the required rate of return on shares. b. Calculate the weighted Average Cost of Capital (WACC) of the firm. Problem 4 (12 marks) Consider the following two projects and their respective cash flows. The WACC is equal to 10%. Time 0 1 2 3 4 Project A -10,000 3,000 5,000 4,000 -3,000 Project B -11,000 5,000 4,000 -3,000 3,000 a. Calculate the NPV of each project. b. Which project would you choose if A and B are mutually exclusive

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