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WACC. The common stock of Buildwell Conservation & Construction Inc. (BCCI) has a beta of 0.9. The treasury bill rate is 4% and the market
WACC. The common stock of Buildwell Conservation & Construction Inc. (BCCI) has a beta of 0.9. The treasury bill rate is 4% and the market risk premium is estimated at 8%. BCCIs capital structure is 30% debt, paying a 5% interest rate, and 70% equity. Buildwell pays tax at 21%.
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What is BCCis cost of equity capital?
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What is its WACC?
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IF BCCI is presented with a normal project with an internal rate of return of 12%, should it accept the project?
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