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ABC Inc. is evaluating a project. The ABC intends to use 3 0 % debt in funding the project. ABC identifies 5 comparable companies with

ABC Inc. is evaluating a project. The ABC intends to use 30% debt in funding the project. ABC identifies 5 comparable companies with the following equity betas and debt/equity ratios. While the comparable companies have varying marginal tax rates ABCs marginal tax rate is 21%. The current ten-year treasury rate is 2.5% and the EMRP is estimated to be about 6%. The yield on the company's corporate bonds is 4%

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