# Financial Management

Vang Enterprises, which is debt-free and finances only with equity from retained earnings, is considering 7 equal sized capital budgeting projects. Its CFO hired you to assist in deciding whether none, some, or all of the projects should be accepted. You have the following information: rRF = 4.50%; RPM = 5.50%; and b = 0.92. The company adds or subtracts a specified percentage to the corporate WACC when it evaluates projects that have above- or below-average risk. Data on the 7 projects are shown below. If these are the only projects under consideration, how large should the capital budget be?

1. 👍 1
2. 👎 0
3. 👁 315
1. I don't see any data. If you tried to copy and paste this website doesn't allow that except for the tutors.

1. 👍 0
2. 👎 0

## Similar Questions

1. ### Finance

Evans Technology has the following capital structure. Debt ............................................ 40% Common equity .......................... 60 The aftertax cost of debt is 6 percent, and the cost of common equity (in the

asked by Albert on November 16, 2015
2. ### finance 34

34. The retained earnings of the firm belong to A. creditors B. preferred stockholders C. common stockholders D. bondholders I chose (C) common stockholders, because the equity section is divided into two accounts 1. common stock

asked by Jason on July 24, 2008

I have the following data: 40% debt, 10% preferred, and 50% common equity. After-tax cost of debt 4.00%, cost of preferred 7.50% and cost of retained earnings is 11.50% in using this formula: WACC = wdrd(1-T) + wprp + wcrs

asked by tricica on August 22, 2010
4. ### Finance

You were hired as a consultant to Giambono Company, whose target capital structure is 40% debt, 15% preferred, and 45% common equity. The after-tax cost of debt is 6.00%, the cost of preferred is 7.50%, and the cost of retained

asked by Anonymous on April 12, 2011
5. ### finance

You were hired as a consultant to Giambono Company, whose target capital structure is 40% debt, 15% preferred, and 45% common equity. The after-tax cost of debt is 6.00%, the cost of preferred is 7.50%, and the cost of retained

1. ### Accounting

Entries for Stock Dividends Organic Life Co. is an HMO for businesses in the Portland area. The following account balances appear on the balance sheet of Organic Life Co.: Common stock (250,000 shares authorized), \$125 par,

asked by Anonymous on June 7, 2013
2. ### Finance

Spam Corp. is financed entirely by common stock and has a beta of 1.0. The firm is expected to generate a level, perpetual stream of earnings and dividends. The stock has a price-earnings ratio of 8 and a cost of equity of 12.5%.

asked by Samantha on March 17, 2012
3. ### Accounting

Does retained earnings include investment capital? I thought no. I thought retained earnings is cumulative net income - dividends. However, Wikipedia says: Ending Retained Earnings = Beginning Retained Earnings + Investments −

asked by AcctStudent on August 5, 2007
4. ### Finance

Byron Corporation's target capital structure consists of 40% debt and 60% common equity. Assume that the firm has no retained earnings. The company's the last dividend (Do) was \$2.00, which is expected to grow at a constant rate

asked by Anonymous on April 13, 2012
5. ### Finance

Your company, Martin Industries, Inc., has experienced a higher than expected demand for its new product line. The company plans to expand its operation by 25% by spending \$5,000,000 for an additional building. The firm would like

asked by Miss Patte on November 1, 2015

More Similar Questions