The answer is D. The U.S government offers ten types of loans.
Answer:
6.79%
Explanation:
The IRR is the discount rate that equates the cost of a project to its after tax cash flows.
The IRR can be calculated using a financial calculator:
Cash flow for year 0 = -$1,500,000
Cash flow for year 1 to 4 = $80,000
Cash flow for year 5 = $1,625,000 + $80,000 = $1,705,000
IRR = 6 79%
I hope my answer helps you
Answer:
The Answer is as follows;
Explanation:
Dividend on preferred stocks=$10*7.5%=$.075
Transaction Costs=$1
Total financing Cost=$1.75
Which is 17.5% (1.75/10)
The market price is not relevant for company's cost of financing. Therefore we have taken dividend payable on face value and transaction costs of issue for purpose of determination of financing cost.