1. Our company has 3 projects to evaluation and $625,000 to spend. Using the information from problems 4,5, and 6, the project results are as follows: Project 1: Investment is $300,000 and the IRR is 10.5% Project 2: Investment is $300,000 and the IRR is 14.5% Project 3: Investment is $275,000 and the IRR is 13.5% What decisions do you make regarding the projects?
2. Our company has $100 million in Common Stock and no preferred stock, the company's tax rate is 25%, each share is currently selling for $125.00, dividends for the past 5 years have been:
2015 $3.50
2014 $3.04
2013 $2.65
2012 $2.30
2011 $2.00
What is our required return for Common Stock?
3. Our company has $75 million in Bonds outstanding, that have a par value of $1,000, a coupon rate of 12%, and is currently selling for $950. The company's tax rate is 25%. What is our required return for Bonds? _
4. Our company has no Preferred Stock and using the information in questions 4 and 5
a. How much capital does the company have?
b. What percentage of our capital is common stock?
c. What is the Weighted Average Cost of Capital for our company?
Our company has 3 projects to evaluation and $575,000 to spend. Given the information in problems 4, 5 and 6, the project results are as follows:
Project 1: Investment is $300,000 and the NPV is $10,500 Project 2: Investment is $300,000 and the NPV is -$8,500 Project 3: Investment is $275,000 and the NPV is $9,500 What decisions do you make regarding the projects?