Company abc is a company working in powerhouse industry. we have the balance sheet for that company in 2016 as below. risk premium in stock market is 10% and risk premium in bond market is 5%. ytm for long-term bond now trading in market is20%. the abc company has 100 millions common stock each value at 8$ and it could rise money at risk-free rate. (all of the company debt are bank borrowing and it does not issued any bond).

the board of manager decided to consider a project in e-payment industry. there's information for 3 rivals in this industry as below.

calculate the discount rate that managers have to consider for this new project? (tax=20%)

Assets (bilion $) Current delt long-term debt Common stock rivals W X Y 160 240 1000 Equity Beta 0.7 0.9 1.5 debts (bilion $) Current Assets 500 -term Assets 900 debt financing. 30 40 60 long-term Equity Financing/ 70 60 40