4. Evenflow Corp has 9 million shares of common stock outstanding, 250,000 shares outstanding of preferred stocks, and 8,000 semiannual bonds outstanding. There are 8,000 semiannual bonds paying a 6.5% coupon with 20 years to maturity and currently selling for $920 per $1000 face value. b. а. The preferred stocks are selling for $93 paying $5constant dividends. The current market price of the stock is $57 and the beta is 1.05. The market risk premium is 8% and 4.5% risk-free rate. с. What is the weighted average cost of capital (WACC) if the marginal tax rate is 35%? If the cash flow from assets are -$135,000 in year 0, $46,000 in year 1, $57,000 in year 2, and $62,000 in year 3, should the firm accept or reject the project? The floatation costs for issuing debt preferred stock and common stock are 5% 3% and 7% а. b.

4. Evenflow Corp has 9 million shares of common stock outstanding, 250,000 shares outstanding of preferred stocks, and 8,000 semiannual bonds outstanding. There are 8,000 semiannual bonds paying a 6.5% coupon with 20 years to maturity and currently selling for $920 per $1000 face value. b. а. The preferred stocks are selling for $93 paying $5constant dividends. The current market price of the stock is $57 and the beta is 1.05. The market risk premium is 8% and 4.5% risk-free rate. с. What is the weighted average cost of capital (WACC) if the marginal tax rate is 35%? If the cash flow from assets are -$135,000 in year 0, $46,000 in year 1, $57,000 in year 2, and $62,000 in year 3, should the firm accept or reject the project? The floatation costs for issuing debt preferred stock and common stock are 5% 3% and 7% а. b.

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Description: answer last 3 questions Evenflow Corp has 9 million shares of common stock outstanding, 250,000 shares outstanding of preferredstocks, and 8,000 semiannual bonds outstanding.4.There are 8,000 semiannual bonds paying a 6.5% coupon with 20 years to mat

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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