Garner Inc. is considering a project that has the following…

Garner Inc. is considering a project that has the following cash flow data.  What is the project’s payback?   Year                                  0                    1                    2                    3      Cash flows                     -$250             $100              $150              $100

To estimate the company’s WACC, Ditto Inc. recently hired yo…

To estimate the company’s WACC, Ditto Inc. recently hired you as a consultant.  You have obtained the following information.  (1) The firm’s bonds mature in 20 years, have an 8.00% annual coupon, a par value of $1,000, and a market price of $1,000.00. (2) The risk-free rate is 4.50%, the market risk premium is 5.50%, and the stock’s beta is 1.0.  (3) The company’s tax rate is 40%.  (4) The target capital structure consists of 35% debt and the 65% common equity.  The firm uses the CAPM to estimate the cost of common stock, and it does not expect to issue any new shares.  What is its WACC?