Thank you. Question #3 Omicron Industries' Market Value Balance Sheet (S Millions) and Cost...
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Question #3 Omicron Industries' Market Value Balance Sheet (S Millions) and Cost of Capital Assets Cash Other Assets 500 E Liabilities Debt Cost of Capital Debt 0 200 uity 300 Equity 6% 12% 35% tc Omicron Industries New Project Free Cash Flows Year Free Cash Flows 2 S40 S50 S60 Assume that this new project is of average risk for Omicron and that the firm wants to hold constant its debt to equity ratio. a) Omicron's weighted average cost of capital is closest to 10 points) b) The NPV for Omicron's new project is closest to (10 points)
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