Your power plant on Gilligan’s Island is producing too much air pollution. The professor gives you three choices for dealing with this problem:
Assume that the cost of generating power on the mainland is approximately the same as the cost of generating power at your Gilligan’s Island 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)
Please answer in essay format showing all your calculation in appendixes choose the best option for Gilligan’s Island. Support your answer with your calculations. In addition, to calculations use specified resources, other appropriate scholarly resources, including older articles.
Length: However long you need to answer the question.
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.