IP Cost of Capital Problem

Decreases why interest q29 what happens to the value

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Unformatted text preview: d projects if corporate taxes fall? rate costs rise (less subsidy) but after tax project revenues rises more. Increases Why? Interest Q30 What happens to the $ value of approved projects if Bond defualtsYields rise and required rates of return on stocks rise so WACC increases Decreases Why? rise or or equity risk premiums rise? and less projects are approved. (1) Pretax Project Revenues or Cost saving: Year1 Year2 A 20 25 B 15 20 C 30 20 D -5 -10 Year3 30 30 15 70...
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This note was uploaded on 07/17/2013 for the course CBBU 1003 taught by Professor Prof.algreco during the Spring '11 term at Fordham.

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