Mimic Corporation has 25,000 million shares of common stock outstanding with a beta of 1.36, a market price of RM14 a share, and cost of equity at 7.5%. Mimic Corporation also has RM150 million of debt outstanding that is selling at 102 percent of par that has a yield to maturity of 8 percent. The tax rate is 31 percent and all interest is tax deductible.

1 what is the wacc

2If Mimic Corporation is considering a project that has an initial cost of RM345,000 and cash inflows of RM82,500, RM125,000, RM145,000 and RM225,000 for Years 1 to 4, respectively. The project has the same risk level as the firm's current operations. Should the firm accept the project?

As a firm analyst, one of your roles is to determine the risk level of Mimic Corporation. Risk can be divided into systematic risk and unsystematic risk. Explain the determinants you will use in deciding the firm's risk level and identify which risk is more important and unavoidable.