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QUESTION 4: UOT Industries has a target debt/equity ratio of 2/3. It has earned $12,000,000,
which in part or total can be distributed to stockholders or reinvested in the firm. The investment
opportunities facing UOT are as follows:
Project Initial Investment IRR
A $5,000,000 25%
B. $3,000,000 21%
C. $6,000,000 18%
D $6,000,000 16%
E. $4,000,000. 13%
F $5,000,000 10%
a. UOT rwacc is 14%. Which projects UOT should be investing in, if the projects have same risk
and capital
b. Repeat part a, if rwacc is 17%?

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QUESTION 4 UOT Industries has a target debtequity ratio of.pdf

  • 1. QUESTION 4: UOT Industries has a target debt/equity ratio of 2/3. It has earned $12,000,000, which in part or total can be distributed to stockholders or reinvested in the firm. The investment opportunities facing UOT are as follows: Project Initial Investment IRR A $5,000,000 25% B. $3,000,000 21% C. $6,000,000 18% D $6,000,000 16% E. $4,000,000. 13% F $5,000,000 10% a. UOT rwacc is 14%. Which projects UOT should be investing in, if the projects have same risk and capital b. Repeat part a, if rwacc is 17%?