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problem: Taylor Technologies has a target capital structure, which are 40% debt & 60% equity. The equity will be financed with retained earnings. The company's bonds have a yield to maturity of 10%. The company's stock has a beta = 1.1. The risk free value is six percent, the market risk premium is 5%, & the tax rate is 30%. The company is considering a project with the following cash flows:

Project

Year Cash Flow

0

($50,000)

1

35,000

2

43,000

3

60,000

4

-40,000

Determine the project's modified internal rate of return (MIRR)?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M918148

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