Business, 14.04.2020 21:43 kkkhomewirk

. Bam Corporation is considering the following independent projects for the coming year. Their target capital structure is 60 percent debt and 40 percent equity. The after-tax cost of debt is 6 percent and the cost of equity is 15 percent. Expected Required Rate of Risk Project Investment Return Level A $13 million 17% High B 16 million 9 Low C 25 million 14 Average D 10 million 8 Low E 18 million 16 High Bam adjusts its WACC for risk by adding 2% to the WACC for high-risk projects and subtracting 1.0% for low-risk projects. Required: a) Determine the WACC for Bam Corporation. b) Determine which projects Bam Corporation should accept and what would be the dollar size of its capital budget.

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. Bam Corporation is considering the following independent projects for the coming year. Their targe...