Suppose Fries Ltd. pays a corporate tax rate of 30% and is financed as follows:

30% senior secured debt with an annual yield of 4.8% 10% unsecured junior debt with an annual yield of 9.9% 50% common shares with an annual return on equity of 7.0% 10% preferred shares with an annual return on equity of 8.0%

Calculate the Weighted Average Cost of Capital; type the answer, in percentage terms rounded to the nearest percentage point, in the box below (e.g., if 4.05% you would type 4).

1. The trained chefs would then generate $1 million of extra revenue at the end of each year (December 31) for 16 years and then zero thereafter.

Calculate the NPV of the program; type your answer in the box below, rounded to the nearest dollar.

Answer rating: 100% (QA)

To calculate the Weighted Average Cost of Capital WACC well use the formula WACC EVRe DVRd Where E m... View the full answer