Question No: 07 This is a subjective question, hence you have to write your answer in the Text-Field given below. XYZ Co

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Question No 07 This Is A Subjective Question Hence You Have To Write Your Answer In The Text Field Given Below Xyz Co 1 (231.58 KiB) Viewed 107 times

Question No: 07 This is a subjective question, hence you have to write your answer in the Text-Field given below. XYZ Corp. has 20 million shares of common stock outstanding. The common stock currently sells for $70 per share and has a beta of 0.80 XYZ Corp. has 400.000 bonds outstanding and currently being traded at par. The ytm (yield to maturity) of the bond is 7% p.a. The market risk premium is 8%, T-bills are yielding 3.5% p.a and corporate tax rate is 28%. All p.a. rates are EAR What is the firm's market value capital structure (i.e. Market value of debt Market value of equity)? What is the firm's cost of capital? If XYZ Corp. is evaluating a new investment project that has an investment of $100 million at year 0 and is expected to have a cash flow of $25 million from Year 1 onwards growing at the rate of 6. p.a. forever, what is the NPV of the project? [10] 20000 Max Upto 20000 Characters) Format Table Insert - Formats B I 三三三三 ESKINSUK KAR ENG 1415 14/11/20221 25°C i i