The US MNC is also considering a project in the US. They will use the same debt/equity mix as in the Brazilian project. The 5 year Treasury rate is 1.7% and the firm can borrow at 55 bps over Treasury. Their effective tax rate is 27.9%. The S&P 500 return they are using is 8.15% and the domestic beta is 1.5.

a. Using the above data, compute the domestic WACC.

b. Internal analysis of the US project is projected to return an internal rate of return of 7%. Using the WACC computed in a, should the firm proceed with the project? Explain.

c. If they decide that their multi-market WACC is a 50% weight for each project, what would their multi-market weighted WACC be?