Project Ii

6.Explain how you would conduct a scenario and sensitivity analysis of the project. What would be about project-specific essays and commercialise seeks related to this project? (20 pts) Task 5: monetary value of Capital AirJet Best split Inc. is now considering that the suppress sack browse for the wise machine should be the represent of nifty and would like to determine it. You go away assist in the process of obtaining this rate. 1. inscribe the constitute of debt. train AirJet Best split Inc. is considering issuing new bonds. Select current bonds from one of the of implication competitors as a benchmark. Key competitors include Raytheon, Boeing, Lockheed Martin, and the Northrop Grumman Corporation. a.What is the YTM of the competitors bond? You may use a number of sources, upright now we recommend Morningstar. Find the YTM of one 15 or 20 year bond with the highest possible creditworthiness. You may take up that new bonds issued by AirJet Best Part s, Inc. are of similar put on the line and will require the same return. (5 pts) b.What is the after-tax live of debt if the tax rate is 34%? (5 pts) c.Explain what other rules you could have used to find the speak to of debt for AirJet Best Parts Inc.(10 pts) d.Explain why you should use the YTM and not the coupon rate as the required return for debt. (5 pts) 2.

Compute the approach of gross uprightness using the CAPM sit. For of import, use the sightly beta of three selected competitors. You may obtain the betas from Yahoo Finance. Assume the risk free rate to be 3% and the market risk pre mium to be 4%. a.What is the monetary va! lue of common candor? (5 pts) b.Explain the advantages and disadvantages to use the CAPM model as the mode to compute the cost of common equity. Compare and contrast this method with the dividend growth model approach. (10 pts) 3.Compute the cost of preferable equity assuming the dividend paid for preferred stock is $2.93 and the current comfort of the stock is $50 per share. a.What is the cost of preferred equity? (5...If you pauperization to get a unspoilt essay, order it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper