Financial Planning

Camber Corporation has to decide if they can finance purchasing 10 new machines for all their manufacturing sites. The machines cost $1.73 million each, and the supplier agreed to the following payment terms, 40% upfront, and the remainder to be paid over 4 years at an annual rate of 12%.

b) Critically discuss the effect of increasing the amount paid upfront when corporations make capital purchases, focusing on the benefits and drawbacks

You were hired as a consultant to XYZ Company, whose target capital structure is  30% debt, 8% preferred, and 62% common equity. The interest rate on new debt is 6.30%, the yield on the preferred is 5.40%, the cost of common from retained earnings is 16.80%, and the tax rate is 40.00%. The firm will not be issuing any new common stock. What is XYZ's WACC?

Round your answer to two decimal places. For example, if your answer is $345.6671 round as 345.67 and if your answer is .05718 or 5.7182% round as 5.72.   A. 10.30% B. 9.95% C. 14.62% D. 11.98% E. 9.23%


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