Question
The common stock of Buildwell Conservation & Construction, Inc., has a beta of .70. The Treasury bill rate is 3%, and the market risk premium
| The common stock of Buildwell Conservation & Construction, Inc., has a beta of .70. The Treasury bill rate is 3%, and the market risk premium is estimated at 7%. BCCIs capital structure is 20% debt, paying a 8% interest rate, and 80% equity. Buildwell pays tax at 30%. |
| a. | What is BCCIs cost of equity capital? (Round your answer to 2 decimal places.) |
| Cost of equity capital | % |
| b. | What is BCCIs WACC? (Round your answer to 2 decimal places.) |
| WACC | % |
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Essentials Of Investments
Authors: Zvi Bodie, Alex Kane, Alan J. Marcus
12th Edition
1260772160, 978-1260772166
