Problem 12-20 Question Help Your firm is planning to invest in an automated packaging plant. Harburtin Industries is an all equity firm that specializes in this business Suppose Harburtin's equity beta is 0.81, the risk-free rate is 3%, and the market risk premium is 4% a. If your firm's project is all-equity financed, estimate its cost of capital After computing the project's cost of capital you decided to look for other comparable to reduce estimation error in your cost of capital estimate you find a second firm, Thurbinar Design, which is also engaged in a similar line of business. Thurbinar has a stock price of $22 per share with 16 milion shares outstanding It also has 5114 million in outstanding debt, with a yield on the detit of 4.1% Thurbinar's equity beta is 100 b. Assume Thurbinar's debt has a beta of zero Estimate Thurbinar's unlevered beta Use the unlevered beta and the CAPM to estimate Thurbina's unlevered cost of capital c. Estimate Thurbinar's equity cost of capital using the CAPM. Then assume its debt cost of capital equals ts yield and using these results, estimate Thurbina's unlevered cost of capital d. Explain the difference between your estimate in part (b) and part(e) e. You decide to average your results in part (b) and part(e), and the average this result with your estimate from parta) What is your state for the cost of capital of your firm's project? a. If your firm's project is all equity financed estimate its cost of capital The project's cost of capital is % (Round to two decimal places) Incorrect: es lodules tor Enter your answer in the answer box and then click Check Answer Check And Clear All 7 parts remaining