Given the following information on a private restaurant BestinTown (BIT), operating in an upscale shopping mall:

Typical simplified balance sheet for the restaurant industry:

Total assets	$ 250 MM	Total liabilities	$ 150 MM
		Total equity	$ 100 MM

Also, you have gathered the following information:

• (BIT, industry) = 1.60
• (BIT, industry) = 0.85
• average after-tax cost of borrowing for the restaurant industry = 7%
• one month t-bill yield = 2%
• market risk premium = 6%

What is the equity cost of B-I-T ?

What is the WACC you would use to carry out this DCF analysis?

Assume further that you expect that B-I-T would only operate for 12 years and the future becomes unknown, what would be the maximum offer you would make?