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28 Sep 2019
Cost of Common Equity
Percy Motors has a target capital structure of 30% debt and 70% common equity, with no preferred stock. The yield to maturity on the company's outstanding bonds is 8%, and its tax rate is 40%. Percy's CFO estimates that the company's WACC is 13.20%. What is Percy's cost of common equity? Round your answer to two decimal places.
%
IRR
Project K costs $44,572.80, its expected cash inflows are $9,000 per year for 10 years, and its WACC is 14%. What is the project's IRR? Round your answer to two decimal places.
%
Payback period
Project K costs $60,000, its expected cash inflows are $14,000 per year for 8 years, and its WACC is 11%. What is the project's payback? Round your answer to two decimal places.
years
Cost of Common Equity
Percy Motors has a target capital structure of 30% debt and 70% common equity, with no preferred stock. The yield to maturity on the company's outstanding bonds is 8%, and its tax rate is 40%. Percy's CFO estimates that the company's WACC is 13.20%. What is Percy's cost of common equity? Round your answer to two decimal places.
%
IRR
Project K costs $44,572.80, its expected cash inflows are $9,000 per year for 10 years, and its WACC is 14%. What is the project's IRR? Round your answer to two decimal places.
%
Payback period
Project K costs $60,000, its expected cash inflows are $14,000 per year for 8 years, and its WACC is 11%. What is the project's payback? Round your answer to two decimal places.
years
Elin HesselLv2
28 Sep 2019
