Intel has determined its optimal capital structure, which is composed of the following sources and target market value proportions:

Long-term debt 20% Preferred stock10 Common stock equity70

Debt: The firm can sell a 10 year, $1,000 par value, 0.08 bond for $1100. A flotation cost of 2 percent of the face value would be required. Preferred Stock: The firm has determined it can issue preferred stock at $60 per share par value. The stock will pay an $ 8 annual dividend. The cost of issuing and selling the stock is $3 per share.

Common Stock: The firm's common stock is currently selling for $40 per share. The dividend expected to be paid at the end of the coming year is $6.5. Its dividend payments have been growing at a constant rate 5 percent. It is expected that to sell, a new common stock issue must be underpriced at $1 per share and the firm must pay $1 per share in flotation costs. Additionally, the firm's marginal tax rate is 40 percent. Intel is considering making a new investment of $ 3000 in a new chip producing facility and has come with the following estimated operating cash flows $ 1500 per year. The project will end after four years. The before tax cost of debtis The firm's after tax cost of debtis The cost of referred stock is IThe cost of retained earnings is: The cost of new issuance of common stocks is: Assuming Intel plans to pay out all of its earnings as dividends, the weighted average cost of capital is The payback period of the project is: The Net Present value of the project is: Tir According to NV, should Intel accept the project? If yes write down number 1 if not write down number 2. 'The profitability index of the proiect is According to Profitability index should Intel accept the project IF yes write down number I if not write down number 2