This is one question that builds on the previous answers. Please answer them all. Question $1\mathrm{.}1$

On their latest income statement, Emily's Construction reported sales of $$674,000,$ costs of $$391,600,$ depreciation of $$111,200,$ and dividends of $$68,976.$ The company's ROE is $5\mathrm{.}9$ percent, and they face a $21$ percent tax rate. Assuming the ratio of dividends to earnings in constant, estimate the growth rate of dividends.

g $=\%$

Question $1\mathrm{.}2$

Emily's Construction just paid a dividend of $$3\mathrm{.}30,$ and their common stock is priced at $$61\mathrm{.}90$ per share. Calculate the required return on equity.

ROE $=\%$

Question $1\mathrm{.}3$

Emily's Construction has one issue of bonds outstanding. The bonds pay a $8\mathrm{.}90$ percent semiannual coupon, mature in $8$ years, and currently sell at $113\mathrm{.}00$ percent of par. Calculate the company's required return on debt.

$=\%$

Question $1\mathrm{.}4$

Emily's Construction has a debt$-$equity ratio of $0\mathrm{.}57$ and a tax rate of $21$ percent. What is the company's overall required rate of return?

WACC $=\%$

Question $1\mathrm{.}5$

Emily's Construction is considering offering a new product. This product requires an investment of $$113,000$ in new fixed assets and $$24,350$ in net working capital, all of which is recoverable at the end of the project. The fixed assets will be depreciated straight$-$line to zero over the $3-$year life of the project. The company spent $$10,000$ to hire a consult to estimate the potential costs and revenue associated with this project. The consultant projects the product will produce annual sales of $$96,600$ with annual costs of $$56,500.$ At the end of the project, the company should be able to sell the fixed assets for $$16,600.$

What is the project's operating cash flow?

OCF $=$ $

Question $1\mathrm{.}6$

Identify the cash flows at the start and end of the project.

CF$0$

Question $1\mathrm{.}7$

CF$3=$

Question $1\mathrm{.}8$

What is the project's net present value?

NPV $=$ $

Question $1\mathrm{.}9$

How sensitive are these estimates to a change in required fixed assets? Suppose required fixed assets increase by $7$ percent.

New OCF $=$ $

Question $1\mathrm{.}10$

New NPV $=$ $

Question $1\mathrm{.}11$

Inflation is estimated to be $5\mathrm{.}60$ percent. What is the real return on this project, assuming all originally projected cash flows are correct?

Real return $=\%$