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The common stock of Buildwell Conservation & Construction Incorporated ( B C C l ) has a beta of 0 . 9 . The Treasury
The common stock of Buildwell Conservation & Construction Incorporated has a beta of The Treasury bill rate is and the market risk premium is estimated at BCCls capital structure is debt, paying an interest rate of and equity. The debt sells at par. Buildwell pays tax at
a What is BCCls cost of equity capital?
Note: Do not round intermediate calculations. Enter your answer as a percent rounded to decimal places.
b What is its WACC?
Note: Do not round intermediate calculations. Enter your answer as a percent rounded to decimal places.
c If is presented with a normal project with an internal rate of return of should it accept the project if it has the same level of risk as the current firm?
tablea Cost of equity capital,,
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