subject
Business, 14.04.2020 21:43 kkkhomewirk

. Bam Corporation is considering the following independent projects for the coming year. Their target capital structure is 60 percent debt and 40 percent equity. The after-tax cost of debt is 6 percent and the cost of equity is 15 percent. Expected Required Rate of Risk Project Investment Return Level A $13 million 17% High B 16 million 9 Low C 25 million 14 Average D 10 million 8 Low E 18 million 16 High Bam adjusts its WACC for risk by adding 2% to the WACC for high-risk projects and subtracting 1.0% for low-risk projects. Required: a) Determine the WACC for Bam Corporation. b) Determine which projects Bam Corporation should accept and what would be the dollar size of its capital budget.

ansver
Answers: 2

Another question on Business

question
Business, 22.06.2019 07:50
Budget in this final week, you will develop a proposed budget of $150,000 for the first year of the program and complete the final concept paper for the proposed program due for senior management review. the budget should identify the program's anticipated expenses for the year ahead. budget line items should be consistent with the proposed program and staffing plan. using the readings for the week, the south university online library, and the internet, complete the following tasks: create a proposed budget of $150,000 for the first year of the proposed program including the cost for personnel, supplies, education materials, marketing costs, and so on in a microsoft excel spreadsheet. you may transfer your budget to your report. justify the cost for each item of the proposed budget in a budget narrative.
Answers: 2
question
Business, 22.06.2019 13:50
The state troopers in one state have a motto, “nine you’re fine; ten you’re mine,” which is the standard that they use for pulling over speeders on the state highways. in other words, if the posted speed limit is 55 mph, drivers can drive at a rate up to 64 mph without fear of getting a ticket. which of the following best describes the ethical culture in the state? a. the troopers are following a standard of positive law. b. the troopers are following a normative standard. c. the troopers are following a headline test. d. the troopers are following the blanchard/peale standard.
Answers: 1
question
Business, 22.06.2019 19:00
The east asiatic company (eac), a danish company with subsidiaries throughout asia, has been funding its bangkok subsidiary primarily with u.s. dollar debt because of the cost and availability of dollar capital as opposed to thai baht-denominated (b) debt. the treasurer of eac-thailand is considering a 1-year bank loan for $247,000.the current spot rate is b32.03 /$, and the dollar-based interest is 6.78% for the 1-year period. 1-year loans are 12.04% in baht.a. assuming expected inflation rates of 4.3 % and 1.24% in thailand and the united states, respectively, for the coming year, according to purchase power parity, what would the effective cost of funds be in thai baht terms? b. if eac's foreign exchange advisers believe strongly that the thai government wants to push the value of the baht down against the dollar by5% over the coming year (to promote its export competitiveness in dollar markets), what might the effective cost of funds end up being in baht terms? c. if eac could borrow thai baht at 13% per annum, would this be cheaper than either part (a) or part (b) above?
Answers: 2
question
Business, 22.06.2019 20:00
If an investment has 35 percent more nondiversifiable risk than the market portfolio, its beta will be:
Answers: 1
You know the right answer?
. Bam Corporation is considering the following independent projects for the coming year. Their targe...
Questions
question
Mathematics, 23.04.2021 01:20
question
Mathematics, 23.04.2021 01:20
question
Mathematics, 23.04.2021 01:20
question
Mathematics, 23.04.2021 01:20
question
Mathematics, 23.04.2021 01:20
question
English, 23.04.2021 01:20
question
Mathematics, 23.04.2021 01:20
Questions on the website: 13722367