Water pool Company uses only debt and equity. Its interest rate is 15% and debt ratio is 40%. Its last dividend was Tk. 2, its expected constant growth rate is 4.5% and its stock sells at Tk. 20. Its tax rate is 40%. Its capital structure follows Debt $104,000,000 Equity 156,000,000 Total liability and equity 260,000,000 Requirement: i) Compute WACC? ii) If the company is offered to invest in a project, which pays return at a rate of 10%, should the company invest in that project?

03