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 .
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