Modified Internal Rate of Return (MIRR) of Taylor Technologies
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2.) Taylor Technologies has a target capital structure, which is 40% debt and 60% equity. The equity will be financed with retained earnings. The company's bonds have a yield to maturity of 10%. The company's stock has a beta=1.1. The risk-free rate is 6%, the market risk premium is 5%, and the tax rate is 30%. The company is considering a project with the following cash flows:
(see chart in the attached file)
What is the project's modified internal rate of return (MIRR)?
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The solution explains how to calculate the modified internal rate of return (MIRR).
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2.) Taylor Technologies has a target capital structure, which is 40% debt and 60% equity. The equity will be financed with retained earnings. The company's bonds have a yield to maturity of 10%. The company's stock has a beta=1.1. The risk-free rate is 6%, the market risk premium is 5%, and the tax rate is 30%. The company is considering a project with the following cash flows:
Year Project Cash ...
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