Your firm has an average-risk project under consideration. You choose to fund the project in the same manner as the firm's existing capital structure. If the cost of debt is 11.00%, the cost of preferred stock is 12.00%, the cost of common stock is 17.00%, and the WACC adjusted for taxes is 15.00%, what is the IRR of the project, given the expected cash flows listed here? Use a financial calculator to determine your answer.
A) About 13.11%
B) About 12.02%
C) About 11.16%
D) About 8.94%

Question

Your firm has an average-risk project under consideration. You choose to fund the project in the same manner as the firm's existing capital structure. If the cost of debt is 11.00%, the cost of preferred stock is 12.00%, the cost of common stock is 17.00%, and the WACC adjusted for taxes is 15.00%, what is the IRR of the project, given the expected cash flows listed here? Use a financial calculator to determine your answer. 
A) About 13.11% 
B) About 12.02% 
C) About 11.16% 
D) About 8.94%

Quizplus · Accepted Answer

The Answer of Your firm has an average-risk project under consideration. You choose to fund the project in the same manner as the firm's existing capital structure. If the cost of debt is 11.00%, the cost of preferred stock is 12.00%, the cost of common stock is 17.00%, and the WACC adjusted for taxes is 15.00%, what is the IRR of the project, given the expected cash flows listed here? Use a financial calculator to determine your answer. 
A) About 13.11% 
B) About 12.02% 
C) About 11.16% 
D) About 8.94%

Your Firm Has an Average-Risk Project Under Consideration