D/(D+E) D/E* (1/(1+D/E)) Question 2: Pixelworks is might take on a new project which would cost $10 million dollars and generate cash flows of $5 million over the next 3 years. The project's risk is similar to the risk of the company's current assets. The company's current equity beta is 2.25 and its debt-to-equity ratio is 1/2. The YTM on company debt is 9% and the company's marginal tax rate is 40%. The risk-free rate is 4% and the market risk premium is estimated at 5%. Should Pixelworks proceed with the project