You are given with the following information of two projects planned by your company. Two projects are of the same initial costs with $3 millions. Table 1: (in thousands) Project Year 1 Year 2 Year 3 Year 4 Year 5

A -650 720 - 50 1000 2800

B 560 1875 1600

Answer the following questions.

c) Let the corporate income tax rate be 30%, the cost of debts be 6%, the cost of equity be 25% and there is no preferred stock issued by the firm. What is the debt-to-equity ratio for your company?

Answer rating: 100% (QA)

Debt to Equity Ratio Total Debt Total Equity Total Debt Present Value ... View the full answer