Boeing is evaluating a project to build a super-luxury comme…

Boeing is evaluating a project to build a super-luxury commercial jet dubbed SLJ. The project will last for 20 years. Boeing gets 50% of its sales from the commercial division and 50% from the defense division. The beta of Boeing stock is 1.5. Lockheed is 100% in defense, and the beta for the stock is 0.5, while Arbus is 100% commercial, and the beta of its stock is 2.0. Boeing will use a target capital structure of 40% debt and 60% equity for the SLJ project. Boeing has a 20-year 5% annual coupon bond with a par value of 1000 trading for 1000 dollars. The 20-year Treasury rate is 2%/Year. The risk premium on the market is 5%, and the tax rate is 30%. What is the WACC for the SLJ project?

For the fiscal year ended in December 2020, the EP Enterpris…

For the fiscal year ended in December 2020, the EP Enterprises reported EBIT (Earnings Before Interest and Taxes) of $100 million. The company also reported a Net Income of $50 million. The company had a tax rate of 30%. What is the net operating profit after taxes (NOPAT)?

The ZAM corporation is evaluating a 10-year project to devel…

The ZAM corporation is evaluating a 10-year project to develop yam burgers. The company is publicly traded, and its stock has a beta of 1.0. The company’s 10-year debt is rated “A,” and the spread for 10-year “A” rated bonds is 2%, and the liquidity premium for the bond is 1%. The 10-year Treasury rate is 2%. The company has preferred stocks with an annual dividend of $5, and it is trading for $100. The floatation cost for preferred stock is 5%. The market risk premium is 5%. The company’s capital structure consists of 40% equity, 40% debt, and the rest in preferred stock. The corporate tax rate is 30%. What is the WACC for the project?