show work and abswer question 2

- ABC is considering a project that has the following cash flow and WACC data. (a) (b) (c) What is the project's NPV? What is the project's IRR What is the project's MIRR? Should the project be accepted? Why? (d) WACC: The result of (1) above Year 0 1 2 3 4 5 Cash flows -$1,100 $420 $380 $360 $340 $320 ABC Inc.'s capital structure is 40% debt, 25% preferred, and 35% common equity, and its tax rate is 35%. For financing(a) ABC sold a non- callable bond several years ago that now has 15 years to maturity with 8% annual coupon, paid semiannually, at a price of $1,065and a par value of $1,000. (b) ABC sold a perpetual preferred stock for $95.50 per share, with a $7.50 annual dividend and a flotation cost of 3.00% of the price. (c) ABC also has beta = 1.2, risk free rate of return for = 6.00%; market risk premium RB = 7.00%; The question is: What is the company's WACC? C/Y 2 Period per year 2 N (15*2)=30 PATE (1000*8*/2)=-40 PV 1065 FV-1000 YTM 7.288 After tax cost of debt (7.28% (1-0.354.738 Cost of preferred stock 7.50/95.50(1-0.0317 62 Cost of equity=61+1.276 14.40 WACO 354*14.41+406*4.739425*7.62 8.84 WACO 8.848 2. (5 points) ABC is considering a project that has the following cash flow and WACC data. (a) (b) (c) (d) What is the project's NPV? What is the project's TRR What is the project's MIRR? Should the project be accepted? Why? WACC: The result of (1) above Year 0 1 2