User Account

All Pages

The project npv if the initial outlay is $21 million

Assignment Help Corporate Finance
Reference no: EM13304329

A project can generate unlevered cash flow of $3 million per year in perpetuity. Suppose the firm considering this project finances its operations with an equal mix of debt and equity. The required return on debt is 5%, and the required return on equity is 15%. The marginal corporate tax rate is 30%. What is the project's NPV if the initial outlay is $21 million? Round your answer to one decimal place.

Reference no: EM13304329

Questions Cloud

How much would payables increase : Data on Mertz Co., for the most recent year are shown below, along with the payables deferral period (PDP) for the firms against which it benchmarks. The firm's new CFO believes that the company could delay payments enough to increase its PDP ..
What is the net present value of a baruch mba : Using the above calculations what is the Net Present Value of a Baruch MBA?
What is the firm''s wacc : Suppose a firm is funded 30% with debt (yield of 9%) and has a 32% tax rate. What is the (levered) cost of equity assuming the unlevered cost of equity is 12%? Round your answer to two decimal places.
Financial-gains or losses and market trends : Reports are typically associated with data that is useful for meetings, shareholders and sometimes public information. Organizing the information to make it understandable is one factor to consider, however there are reports that are very tedious inf..
The project npv if the initial outlay is $21 million : A project can generate unlevered cash flow of $3 million per year in perpetuity. Suppose the firm considering this project finances its operations with an equal mix of debt and equit
What is the firm''s wacc if the corporate tax rate is 35% : A firm has 1,000,000 shares of stock outstanding, and each share is currently worth $22. The stock has a beta of 1.2. The firm also has 10-year bonds outstanding with a par value of $10,000,000
The profit will be different from the butterfly spread : If you create a butterfly spread using 3 put options, the profit will be different from the butterfly spread using 3 call options with the same strike prices
What must total asset turnover be : A firm wishes to maintain an internal growth rate of 9.75 percent and a dividend payout ratio of 43 percent. The current profit margin is 6.5 percent and the firm uses no external financing sources.
A warehouse close to the business district : You have decided to cash in on the dancing craze in your town, so you are thinking aboutsetting up a dance studio. You can rent a warehouse close to the business district for $40000 p.a.

Reviews

Write a Review

Corporate Finance Questions & Answers

  What is the required return

The Timberlake-Jackson Wardrobe Co. has 10 percent coupon bonds on the market with nine years left to maturity.  The bonds make annual payments.  If the bond currently sells for $1,145.70, what is its YTM?

  Calculate neals expected roe and standard deviation

Calculate Neal's expected ROE, standard deviation, and coefficient of variation for each of the following debt-to-capital ratios. Do not round intermediate calculations. Round your answers to two decimal places at the end of the calculations.

  Build a balanced scorecard for the unit of the organization

Build a Balanced Scorecard for the unit of the organization for which you work, or have worked. Unless you are in senior management, focus on the unit with which you are most familiar rather than the organization as a whole

  Determine whether the project should be undertaken

The firm is an ongoing profitable business and pays taxes at a 30% rate in the year of income. It uses a 15% discount rate on the new project. Using the NPV approach, determine whether the project should be undertaken.

  Relationship between portfolio risk and stocks in portfolio

What can you say about the relationship between portfolio risk and the number of stocks in the portfolio? What do you think is responsible for this relationship?

  Find the amount of airfare

Kimberly is a self employed taxpayer. She recently spent 1,000 dollar for airfare to travel to Italy. Find the amount of airfare is she allowed to reduce in every of given alternative scenarios?

  Find the rate of return

A leading dealer has advertised money certificates that will triple your amount in next 9 years; that is, if you buy one for $333.33 today, they will pay $1,000 at the end of 9 years.

  Mgt-660 capstone project overview

1.Describe the preferred timing and objectives of your business plan. Include an Excel spreadsheet with critical decisions and dates.

  Compute yield-to-maturity for portfolio of securities

The overall package of "Old Greek Bonds" currently trade in financial markets at 12.5% of its total face value. Compute the yield-to-maturity for this portfolio of securities.

  Finding the best sources of finance

Best Hardware is planning financing for 2 activities. The 1st activity deals with the expansion of the business' warehouse to house inventory as demand is increasing.

  Proper value of the securities being offered

Render an opinion to potential investors on the proper value of the securities being offered

  Find which product makes the largest contribution

Mega Chemical Corporations manufactures Zylex A and a related product called Zylex B. Zylex B, which treade for $15.00 per gallon, is created from a base of Zylex A plus additional ingredients.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd