Calculate the cost of capital for a project with the following characteristics. The total amount required for the projec
Posted: Fri Jul 01, 2022 7:55 am
Calculate the cost of capital for a project with the followingcharacteristics.
The total amount required for the project is 14.5 milliondollars.
A loan for 2.5 million will be requested, at an interest rate of7.85 percent with 2 payments per year, interest compounded at everypayment
A bond issue for 3.9 million will be open, paying a bond rate of14.11 percent with 2 payments per year.
The remaining amount will be financed by issuing commonstock.
The dividends paid are 9.3 and the average price of the stock is85.02
The applicable tax rate is 38 percent
The total amount required for the project is 14.5 milliondollars.
A loan for 2.5 million will be requested, at an interest rate of7.85 percent with 2 payments per year, interest compounded at everypayment
A bond issue for 3.9 million will be open, paying a bond rate of14.11 percent with 2 payments per year.
The remaining amount will be financed by issuing commonstock.
The dividends paid are 9.3 and the average price of the stock is85.02
The applicable tax rate is 38 percent