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T1 EIC 6 (Tutorial) Vince then hands out the following information sheet: To...

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T1 EIC 6 (Tutorial)

Vince then hands out the following information sheet:

Total Capital Available: $100 mil 

Potential Assets for purchase:

  • 787, E(R) = 12.5%, Price: 90mil
  • A380, E(R) = 15%, Price: 120mil

  • 747, E(R) = 14%, Price: 50mil

  • A330, E(R) = 13.5%, Price: 50mil
Vince asks, Using the WACC just calculated, which asset should be bought and how many?

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