Bell Computers is a computer hardware company with an equity beta of 1.5, whereas Macrosoft is a software company with an equity beta of 1.2. Assume that both firms are all-equity financed. Suppose that Macrosoft wants to invest in a project to build computer hardware, like Bell. What is the appropriate discount rate for this project? Assume that the CAPM holds. The risk-free rate is 1% and the market risk premium is 6%.

	A.	10.0%
	B.	5.5%
	C.	4.0%
	D.	8.2%

A firm has a market value of equity of $30,000. It borrows $30,000 at 5%. If the return on equity is 20% and the tax rate is 40%, what is the firms WACC?

	A.	8.3%
	B.	18.4%
	C.	12.5%
	D.	11.5%