Business finance | Management homework help

 

Your boss believes the company’s power plant is producing too much air pollution on a typical island. Your boss gives you three choices for dealing with this problem because he/she does not want to deal with it: 

Don't use plagiarized sources. Get Your Custom Essay on
Business finance | Management homework help
Just from $5/Page
Order Essay
  1. You can pay a pollution tax (Carbon Offsets) one time of $13,000,000 immediately.  
  2. You can close the plant and install a power cable from the mainland to the Island. That will cost you $1,000,000 at the end of this year, $3,000,000 at the end of next year and then $750,000 forever for maintenance.  
  3. You can retrofit the plant with scrubbers to reduce the emissions to make the plant green. That will cost $7.5m at the end of this year and $100,000 for 50-years for maintenance.  

Assume that the cost of generating power on the mainland is approximately the same as the cost of generating power at the Island’s plant. Assume, this comes as a surprise to you and you, have not saved any money in reserves, and you need to raise capital.  Additional information is that market has a 12 percent market risk premium on the power plant with the risk-free rate being 5 percent with a company tax rate of 35 percent.  

Current total raised capital at the power plant:  (This will help you calculate the WACC)

  • Debt –  7,000 outstanding bonds, at 7.5% coupon and 20 years to maturity. These bonds pay interest semiannually and quoted a price of 108 percent of par.  
  • Common Stock -180,000 shares outstanding, selling for $50 per share: Beta .90. 
  • Preferred Stock – 8,000 shares of 5.5 percent preferred stock outstanding, currently selling for $95.00 per share. 

Please answer in essay format and provide your Excel document showing all your calculation in appendixes choose the best option for Island. Support your answer with your calculations. Also, to calculations use specified resources, other appropriate scholarly resources, including older articles.

Length: However long you need to answer the question (Paragraph per option is normal).

Your paper should demonstrate thoughtful consideration of the ideas and concepts presented in the course and provide new thoughts and insights relating directly to this topic. Your response should reflect scholarly writing and current APA standards. Be sure to adhere to University’s Academic Integrity Policy.

* I just need the excel portion with formulas included*******

Order a unique copy of this paper
(550 words)

Approximate price: $22

Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

We are committed to making our customer experience enjoyable and that we are keen on creating conditions where our customers feel secured and respected in their interactions with us.
With our qualified expert team who are available 24/7, we ensure that all our customer needs and concerns are met..

Money Payback-back guarantee

Our refund policy allows you to get your money back when you are eligible for a refund. In such a case, we guarantee that you will be paid back to your credit card. Another alternative we offer you is saving this money with us as a credit. Instead of processing the money back, keeping it with us would be an easier way to pay for next the orders you place

Read more

Zero-plagiarism guarantee

All orders you place on our website are written from scratch. Our expert team ensures that they exercise professionalism, the laid down guidelines and ethical considerations which only allows crediting or acknowledging any information borrowed from scholarly sources by citing. In cases where plagiarism is confirmed, then the costumier to a full refund or a free paper revision depending on the customer’s request..

Read more

Free-revision policy

Quality is all our company is about and we make sure we hire the most qualified writers with outstanding academic qualifications in every field. To receive free revision the Company requires that the Customer provide the request within fourteen (14) days from the first completion date and within a period of thirty (30) days for dissertations.

Read more

Privacy policy

We understand that students are not allowed to seek help on their projects, papers and assignments from online writing services. We therefore strive to uphold the confidentiality that every student is entitled to. We will not share your personal information elsewhere. You are further guaranteed the full rights of originality and ownership for your paper once its finished.

Read more

Fair-cooperation guarantee

By placing an order with us, you agree to the service we provide. We will endear to do all that it takes to deliver a comprehensive paper as per your requirements. We also count on your cooperation to ensure that we deliver on this mandate.

Read more

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency