A firm has book value of equity of $333 million. Its market capitalization is $600 million. It has $150 million in debt and $40 million in cash and short-term investments on the balance sheet. Its CAPM beta is 1.4, the yield to maturity on its debt is 5%, the corporate tax rate is 20%, and the required return on its equity is 11%. What is this firms WACC?

A real estate project has a beta with respect to the S&P 500 of 1.44. The expected return on the market is 7.0%. The relevant risk free rate is 0.80%. What is the minimum return a diversified investor would require to invest in this project?

A firm has positive net debt and operates in a single industry. It is considering a project similar to those the firm normally undertakes. To properly apply the IRR rule, the firm should compare the project's IRR to the required return on its equity (from the CAPM equation).

You are trying to come up with an estimate for the stock price of the Clorox Company. As part of this analysis, you plan to calculate Clorox's required return on equity using the CAPM formula. Which number below is the best choice to use as the risk-free rate in that equation?