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Capital structure Cost of capital weight av...

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Capital structure Cost of capital weight average Debt (bond) 30% 0 0.00% Common stock 60% 3.00% 1.80% Preferred stock 10% 5.86% 0.59% Total 2.39% 5. Should the firm use this WACC for all projects? Explain and provide examples as appropriate. 6. recomputed the net present value of the project based on the cost of capital you found Do you still believe that your earlier recommendation for accepting or rejecting the project was adequate? Why or why not? Rate of return 15% Year Cash flow 0 -3,000,000 1 1,100,000 2 1,450,000 3 1,300,000 4 950,000

 

Paper#1703 | Written in 18-Jul-2015

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