1 You will use the following information for the rest of the assignment (for anything that is not updated in later questions). You are trying to determine what would happen to your firm's WACC if you take on a new project. Your capital structure consists of 25% debt with a cost of 7% and a beta of 0.3, and an equity cost of 16.65%. The market return is 14% and the risk-free rate is 4%. Your firm has invested in three projects, with 25% in project 1 (beta of 1.21, 25% in project 2 (beta of 0.85), and 50% in project 3 (beta of 1.50). The tax rate is 20%. First, what is your current WACC? Input your answer in decimal (not percentage) scale, rounded to three decimal places (12.11% should be entered as 0.121).

2 Let's say that the new project actually has a beta of 0.8 and will make up 40% of the firm's total investments after the project is selected (that means it will reduce the prior projects to make up (100%-40%) of the total firm). What would the firm's new asset beta be? Round your answer to two decimal places.

3 Let's say that you found a new asset beta of 0.83. What would the firm's new levered equity beta be? Round your answer to two decimal places.