_2. (20 points) In this problem, I want you to use the following information to nd WACC for a new project that The Baking Corp. is considering. Specically, The Baking Corp. is thinking of opening a new brick-andmortar kitchen goods store. Assume the three rms below are reasonable comps to use in evaluating this new project. I will ask individual questions along the way to help you. The Baking Corp. plans to use a target debt to value ratio for the new project of 37%. The market risk premium = 6%. The current long-term treasury rate = 2.3%. The rate on debt for the project is estimated by the company to be a 1.75% risk premium over treasuries. The tax rate = 23%. BALANCE SHEET ASSETS Cash Accounts Receivable Inventory Other Cu rrent Assets Total Current Assets Net Fixed Assets Total Assets LIABILITIES AND EQUITY Accounts Payable Short-term Debt Accrued Taxes Total Current Liabilities Long-term Debt Total Liabilities Shareholders' Equity MARKET INFORMATION Market Cap Equity Beta eld to Maturity on Corporate Debt Kitchen Spatula City Goods, Inc. 379 497 507 42 1525 2175 3700 352 274 31 557 2431 3088 512 4132 1.32 3.74% 789 523 752 124 2188 3458 5545 574 221 802 3750 4552 1094 5417 1.15 3.42% ME 422 589 551 1770 2545 4315 421 325 45 791 3428 42 19 97 3855 1.55 4.12%