Your Firm Has an Average-Risk Project Under Consideration

question 40

Multiple Choice

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 9.50%,the cost of preferred stock is 10.00%,the cost of common stock is 12.00%,and the WACC adjusted for taxes is 11.50%,what is the IRR of the project,given the expected cash flows listed here? Use a financial calculator to determine your answer.

• A)About 11.50%
• B)About 28.30%
• C)About 14.67%
• D)There is not enough information to answer this question.

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