Question 3 10 10 pts dobson dairies has a capital

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Question 3 10 / 10 pts Dobson Dairies has a capital structure which consists of 60 % long-term debt and 40 % common stock. The company’s CFO has obtained the following information The before-tax yield to maturity on the company’s bonds is 8 % The company’s common stock is expected to pay a $3.00 dividend at year end (D 1 = $3.00), and the dividend is expected to grow at a constant rate of 7 % a year. The common stock currently sells for $60 a share Assume the firm will be able to use retained earnings to fund the equity portion of its capital budget The company’s tax rate is 40 % What is the company’s weighted average cost of capital (WACC)?
Question 4 0 / 10 pts Susmel Inc. is considering a project that has the following cash flow data. What is the project's payback? Year 0 1 2 3 Cash flows -$500 $150 $200 $300
3.03 years Question 5 10 / 10 pts Cornell Enterprises is considering a project that has the following cash flow and WACC data. What is the project's NPV? Note that a project's expected NPV can be negative, in which case it will be rejected. WACC: 10.00% Year 0 1 2 3 Cash flows -$1,050 $450 $460 $470

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