微信扫一扫
实时资讯全掌握
BPM Ltd. has the following capital structure: 40% debt and 60% equity. The cost of retained earnings is 13%, and the cost of new common stock is 16%. BPM will not have any retained earnings available in the upcoming year. Its before tax cost of debt is 8%, and its corporate tax rate is 40%. BPM is considering between two mutually exclusive projects that have the following cash flows:
Which project should BPM choose? A. Project A since its NPV is $16 million. B. Project B since its NPV is $22 million. C. Project A since its net present value (NPV) is +$5.01 million. |