6. Cost of capital Perry's Products, a privately held company, has two operating divisions: Steel, which accounts for 60% of firm value, and, 011, which accounts for 40% of firm value Perry's Products is financed with debt ($8 million) and equity Perry's Products has gathered the following data on two $4 million)i the equity has a beta of 2.30. competing firms, each of which is very similar to the corresponding division of Perry s: Equity Beta Debt/(Debt+Equity United Steel Union Oil . 80 1.50 .40 . 20 Assume the debt of ALL companies is risk-free. Purther, assume the risk-ree rate of return is 4t, the expected return on the market portfolio is 10t, and the standard deviation of return on the market port fol is 20%. a) Ciculate the Weighted Average Cost of capital (HACC) ot (b) Perry's Products' oil division is considering a project Perry's Products with the following expected cash flows: -237 +120 +60 What is the Internal Rate of Return (IRR) of this project (to good project or a bad project? st percent)? As judged by the IRR method, is this a