Please do not give solution in image format thanku bokintencesYou have the following information about Burgundy Basins, a sink manufacturer.Equity shares outstandingStock price per shareYield to maturity on debtBook value of interest-bearing debtCoupon interest rate on debtMarket value of debtBook value of equityCost of equity capitalTax rateInternal rate of return20million$ 44Weighted average cost5.5%Burgundy is contemplating what for the company is an average-risk Investment costing $48 million and promising an annual ATCF of$5.4 million in perpetulty.a. What is the internal rate of return on the investment? (Round your answer to 2 decimal places.)$ 375million4.99$ 270million$ 460 million12.8%354b. What is Burgundy's weighted-average cost of capital? (Round your answer to 2 decimal places.)

Burgundy BasinsInternal rate of return on the investment = After Tax Cash Flows (ATCF) / Cost of…

Answered: a. What is the internal rate of return…

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter14: Security Structures And Determining Enterprise Values

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Problem 1hM

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Hh2.
You have the following information about Burgundy Basins, a sink manufacturer.Equity shares outstanding 20 millionsStock price per share $40.00Yield to maturity on debt 7.5%Book value of interest-bearing debt $320 millionCoupon interest rate on debt 4.8%Market value of debt $290 millionBook value of equity $500 millionCost of equity capital 14%Tax rate 35%Burgundy is contemplating what for the company is an average-risk investment costing $40 million and promising an annual after-tax-cash flow of $6.4 milion in perpetuity.a. What is the internal rate of return on the investment?
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a. What is the internal rate of return on the investment? (Round your answer to 2 decimal places.) Internal rate of return b. What is Burgundy's weighted-average cost of capital? (Round your answer to 2 decimal places) Weighted average cost