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Affirm Timer Zeta, Inc., a pharmacutical firm can raise up to $700 million for investment from a mixture of debt, preferred stock and retained equity. Above $700 million, the firm must issue new common stock. Assuming that debt costs and preferred stock costs remain unchanged, the marginal cost of capital for amounts up to $700 million will be ____ the marginal cost of capital for amounts over $700 million.
cannot be determined from the information given
An investment project requires a net investment of $100,000. The project is expected to generate annual net cash inflows of $28,000 for the next 5 years. The firm's cost of capital is 12 percent. Determine the payback period for the project.
Project OBOL has an inital outlay (NINV and the only cash outlflow) of $2000. If you are given the information that the NPV of the project is 234.96, what would be the Profitability Index for the project ?
The stock price of Webliography Inc., a web search engine company is currently $31.51 and the current quarterly dividend is $0.25. Consensus estimates for Webliography indicate a growth rate in earnings of 10% into the foreseeable future. If Webliography plans to sell 1 million shares to raise new capital for expansion, what is the cost of new equity if the issuance costs are 8%? (Hint: You need to calculate annual dividend from the quarterly dividend and use that as D0)
If a project has an inital outlay of $560 and cash inflows of $240 per year for three years, what would be its MIRR? Assume a cost of capital of 12%. Would you accept this project?