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Use the following information about a firm to estimate the firm's weighted average cost of capital. - The firm's market value of debt is $95,000,000.

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Use the following information about a firm to estimate the firm's weighted average cost of capital. - The firm's market value of debt is $95,000,000. - The firm has 3,649,000 shares of common stock outstanding, trading at $49.92 per share (market capitalization is shares outstanding multiplied by share price). - It does not have preferred stock outstanding. - The common stock's beta is 1.87 . - The yield on the firm's debt is 7.5%. - The risk-free rate is 1.5% and the expected market return is 6.5% (thus, the market risk premium is 5% ). - The firm's marginal tax rate is 25%. The firm, which is diversified across industries, is considering undertaking a new project within a specific sector that has a unique risk profile. Is it a good idea to use the company's cost of capital to estimate the project's NPV? If not, how could you (using concepts we discussed in class) compute the project's cost of capital

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