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1 - Firm UVW has a face debt value of $70 Million USDs trading at 95%...

1 - Firm UVW has a face debt value of $70 Million USDs trading at 95% with a pre-tax weighted cost of 9%. Firm UVW's common equity for the year was valued at $100 Million of USDs and preferred equity for $15 Million of USDs. The Preferred equity rate was calculated to be 20%. However, the common equity was to be calculated using CAPM approach, with a 3.5% risk free rate and a 15% market risk premium rate, assuming a Beta of 1.2. If the tax rate is 35%, what is Firm UVW s WACC?

2 - Continue considering Firm UVW. Suppose Firm UVW is considering investing in a new project of urban development. The cost of the project is $12 Millions of USD. Firm UVW expects that the non-incremental yearly cash flows from the project are $5 Million of USD for the next five years; e.g. that is $5 Million of USD each year. Using the calculated WACC in the previous question, what is the Net Present Value (NPV) of the project?

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