Project Ii

6.Explain how you would conduct a scenario and sensitivity analysis of the project. What would be some(prenominal) project-specific run a hazards and commercialise hazards related to this project? (20 pts) Task 5: live of Capital AirJet Best split Inc. is now considering that the suppress discount enjoin rate for the wise machine should be the represent of roof and would like to determine it. You go away assist in the process of obtaining this rate. 1. inscribe the constitute of debt. train AirJet Best part Inc. is considering issuing new bonds. Select current bonds from one of the of effect competitors as a benchmark. Key competitors include Raytheon, Boeing, Lockheed Martin, and the Northrop Grumman Corporation. a.What is the YTM of the competitors bond? You may use a number of sources, provided now we recommend Morningstar. Find the YTM of one 15 or 20 year bond with the highest possible creditworthiness. You may take that new bonds issued by AirJ et Best Parts, Inc. are of similar risk and will require the same return. (5 pts) b.What is the after-tax bell of debt if the tax rate is 34%? (5 pts) c.Explain what other rules you could have used to find the damage of debt for AirJet Best Parts Inc.(10 pts) d.Explain why you should use the YTM and not the voucher rate as the required return for debt. (5 pts) 2.

Compute the monetary value of gross uprightness using the CAPM work. For beta, use the sightly beta of three selected competitors. You may obtain the betas from Yahoo Finance. Assume the risk free rate to be 3% and the market risk prem ium to be 4%. a.What is the terms of co! mmon legality? (5 pts) b.Explain the advantages and disadvantages to use the CAPM model as the mode to compute the cost of common equity. Compare and contrast this method with the dividend growth model approach. (10 pts) 3.Compute the cost of preferred equity assuming the dividend paid for preferred stock is $2.93 and the current comfort of the stock is $50 per share. a.What is the cost of preferred equity? (5...If you pauperization to get a near essay, order it on our website: OrderCustomPaper.com

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