Larry larson has proposed that hopheart brewery expand, Ask an Expert

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Larry Larson has proposed that HopHeart Brewery expand their bottling facility. His proposal will bring in a lot of new revenue. If the company goes forward with his plan, they will generate funds with a mix of 50% bonds paying 8.7%/year. 25% bank loans at 8% per year, and 25% preferred stock with a $5.20 dividend each year The stock will sell for $100 per share. The company is heavily taxed, and pays 45% on all of its net income. What is the WACC?

HopHeart only approves Projects that return 6% above their WACC. What MARR must Larry show the board in order to get his project approved?

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Financial Management, Finance

Category:- Financial Management
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