Jack, CFO, of Bright Stars Ltd, is analyzing a new project. The project cost of capital, COC, given by Jack was estimated by:

COC = target equity ratio of the project*cost of equity + target debt ratio*after-tax cost of debt. The cost of equity is estimated using CAPM and reflects the leverage of the project and the after-tax cost of debt is the latest cost of borrowing. The target debt ratio is the optimal debt ratio for the project. Is Jack right?