Question
The common stock of Buildwell Conservation & Construction, Inc., has a beta of .80. The Treasury bill rate is 3%, and the market risk premium
| The common stock of Buildwell Conservation & Construction, Inc., has a beta of .80. The Treasury bill rate is 3%, and the market risk premium is estimated at 7%. BCCIs capital structure is 20% debt, paying a 4% 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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Financial Shenanigans How To Detect Accounting Gimmicks And Fraud In Financial Reports
Authors: Howard M. Schilit, Jeremy Perler, Yoni Engelhart
4th Edition
126011726X, 9781260117264
