In our company the WACC = 5% and the PBT cannot be more than 5 years. Consider the following projects and financial information: Project 1 has an NPV = -20k and an IRR = 12% and a PBT of 36 months; Project 2 has a NPV = -50k and an IRR = 15% and a PBT of 35 motnhs; Project 3 has an NPV = 200k and an IRR= 15% and a PBT of 75 months; Project 4 has a NPV = 95k and an IRR= 7% and a PBT of 12 months. Which project should we choose and why?
Cost of Debt, Cost of Preferred Stock
This article deals with the estimation of the value of capital and its components. we'll find out how to estimate the value of debt, the value of preferred shares , and therefore the cost of common shares . we will also determine the way to compute the load of every cost of the capital component then they're going to estimate the general cost of capital. The cost of capital refers to the return rate that an organization gives to its investors. If an organization doesn’t provide enough return, economic process will decrease the costs of their stock and bonds to revive the balance. A firm’s long-run and short-run financial decisions are linked to every other by the assistance of the firm’s cost of capital.
Cost of Common Stock
Common stock is a type of security/instrument issued to Equity shareholders of the Company. These are commonly known as equity shares in India. It is also called ‘Common equity
In our company the WACC = 5% and the PBT cannot be more than 5 years. Consider the following projects and financial information: Project 1 has an NPV = -20k and an IRR = 12% and a PBT of 36 months; Project 2 has a NPV = -50k and an IRR = 15% and a PBT of 35 motnhs; Project 3 has an NPV = 200k and an IRR= 15% and a PBT of 75 months; Project 4 has a NPV = 95k and an IRR= 7% and a PBT of 12 months. Which project should we choose and why?
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