You Work For An Investment Banking Firm And Have Been Asked By Management Of Ves

To finance the investment, Vestor has issued 20 year bonds with a $1,000 par value, 6% coupon rate and at a market price of $950. Preferred stock paying a $2.50 annual dividend was sold for $25 per share. Common stock of Vestor is currently selling for $50 per share and has a Beta of 1.2. The firm’s tax rate is 34%. The expected market return of the S&P 500 is 13% and the 10-Year Treasury note is currently yielding 3.5%.

Determine what discount rate (WACC) Vestor should use to evaluate the warehousing facility project.

Assess whether Vestor should make the warehouse investment.

Prepare your analysis in a minimum of 700 words in Microsoft® Word.

Use Microsoft® Word tables in the presentation if you choose.

Show all calculations and analysis in the presentation.

Please help! I can give you all my tutor credits if you can assist me in the overview of conducting this problem. Thank you!

BondsYearsPar valueCoupon rateMarket priceBefore tax costTax rateAfter tax costSource of capitalBondsPreferred StockPreferred StockTotalWACC 20$1,0006%$9506.45%34%4.26% Preferred…

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