. 1. Muscat renewable energy project is an BOOT project sponsored by Oman Oil The following data is available for Oman Oil: Beta is 1.5. Debt is 20% and Equity is 80%. Cost of debt is 9%. Tax rate 40%. Muscat renewable energy is planning a debt finance of 70%. It plans to raise a 100 million from banks using a 10 year installment term loan. Cost of debt 12%. Tax rate Is 20% rd Betas of three other renewable energy projects are given below beta equity Tax Rate debt financing percentage AAA 45% 20% . 1.5 BBB 55% 2.75 15% 20% CCC 85% 1.80 30% 20% 70% Assume risk free rate is 7%, and market rate of return is 20%. a) Calculate WACC assuming sponsor's wacc is to be used b) Calculate WACC assuming sponsor's wacc should not be used 1 Omon oil b) find B