(see chart in the attached file)
What is the project's modified internal rate of return (MIRR)?
2.) Taylor Technologies has a target capital structure, which is 40%
debt and 60% equity. The equity will be financed with retained earnings.
The companyâs bonds have a yield to maturity of 10%. The companyâs
stock has a beta=1.1. The risk-free rate is 6%, the market risk premium
is 5%, and the tax rate is 30%. The company is considering a project
with the following cash flows:
Year Project Cash Flow
What is the projectâs modified internal rate of return (MIRR)?
This question was asked on May 16, 2010.
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