Risk free rate is 2%; Return to market portfolio is 11% Beta of debt is .3; Beta of stock is 2.2 Optimal capital structure is 60% stock and 40% bonds Marginal tax rate is 30 %; Firm's stock pays a $3 dividend nest year and grows at 9% Firm issues bonds with 15 year maturity and 6% coupon, semiannual interest Project has $5.000.000 ICO and a 5 year life. The cash flows are: S2.500.000 yr1; $2, 600,000 yr 2: $1, 200,000 yr 3: $900,000 yr 4 and $700.000 yr 5. Accept or Reject