QUESTION $5$

"Axon Industries needs to raise $$1000000$ USDs for a new investment project. If the firm issues $1-$year debt, it may have to pay an interest rate of $10\%,$ although

Axon's managers believe that $8\%$ would be a fair rate given the level of risk. If the firm issues equity, they believe the equity may be underpriced by $9\%.$ What is the

cost $($in USDs$)$ to current shareholders of financing the project out of retained earnings? Note: Express your answers in strictly numerical terms. For example, if the

answer is $$500.$ enter $500$ as an answer."

QUESTION $6$

"Axon Industries needs to raise $$1000000$ USDs for a new investment project. If the firm issues $1-$year debt, it may have to pay an interest rate of $10\%,$ although

Axon's managers believe that $8\%$ would be a fair rate given the level of risk. If the firm issues equity, they believe the equity may be underpriced by $9\%.$ What is the

cost $($in USDs$)$ to current shareholders of financing the project out of debt? Note: Express your answers in strictly numerical terms. For example, if the answer is

$$500.$ enter $500$ as an answer."

QUESTION $7$

"Axon Industries needs to raise $$1000000$ USDs for a new investment project. If the firm issues $1-$year debt, it may have to pay an interest rate of $10\%,$ although

Axon's managers believe that $8\%$ would be a fair rate given the level of risk. If the firm issues equity, they believe the equity may be underpriced by $9\%.$ What is the

cost $($in USDs$)$ to current shareholders of financing the project out of equity? Note: Express your answers in strictly numerical terms. For example, if the answer is

$$500,$ enter $500$ as an answer."