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

%

2.

Reactive Industries has the following capital structure. Its corporate tax rate is 35%.

Security	Market Value	Required Rate of Return
Debt	$30 million	2%
Preferred stock	30 million	4
Common stock	40 million	8

What is its WACC? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

WACC

%