Please answer all the questions

1

A companys weighted average cost of capital is 9.9% per year. A project requires an investment of $1,200 today and it is expected to generate after-tax cash flows of $400 per year for the next five years. What is the projects payback period?

2

The yield to maturity on a companys debt is 6.2% per year and the companys cost of equity financing is 10.9% per year. The book value of the debt is $30.0 million and the book value of the equity is $15.0 million. The companys tax rate is 32%. The market value of the debt is $36.9 million and the market value of the equity is $27.1 million. What is the companys annual weighted average cost of capital?

3

A project requires an investment of $125,000 today and it is expected to generate after-tax cash flows of $5,000 per month for the next three years. The companys weighted average cost of capital is 9.6% per year. What is the projects annual modified internal rate of return?

4

A companys weighted average cost of capital is 12.8% per year. Which of the following independent projects should it pursue?

Project IRR

1-12.2%

2-11.8%

3-13.1%

4-12.6%

5

A companys common stock has a market value of $52.83 per share and its last dividend was $3.94 per share. The stocks beta is 1.07, the tax rate is 31%, and the expected market return is 10.5% per year. The riskiness of the companys equity requires that it provide a risk premium of 3.5% per year over the yield on its long-term debt. If the risk-free interest rate is 4.6% per year, what is the companys annual cost of internal equity financing?

6

A companys weighted average cost of capital is 10.3% per year. Which of the following mutually exclusive projects should it not pursue? Project IRR NPV

1-10.7% $154

2-10.9% $122

3-10.2% -$77

4-10.5% $189