Chapter 13.4

WACC. The common stock of Buildwell Conservation \& Construction Inc. (BCCI) has a beta of 9. The Treasury bill rate is 4%, and the market risk premium is estimated at 8%. BCCI's capital structure is 30% debt, paying a 5% interest rate, and 70% equity. Buildwell pays tax at 21%. (LO13-I) a. What is BCCI's cost of equity capital? b. What is its WACC? c. If BCCI is presented with a normal project with an internal rate of return of 12%, should it accept the project