Your firm is planning to invest in an automated packaging plant. Harburtin Industries is an all-equity firm that specialzes in this business. Suppose Harburtin's equily bota is 0.86, the risk-tree rate is 4\%, and the market risk premium is 5%. a. If your firmis pecject is al-aquty financed, estimate its cost of capital. Aher computing the projects cost of copetal you decided to look for other comparables to reduce estmation error in your cost of capital estmate. You find a second firm, Thurbinar Design, which ia asso ergaged in a similar ine of business. Thurbinar has a stock price of $17 per sharo, with 16 millon shases outstanding it also has $120 milion in outstanding debc with a yiald on the debt of 4.6%. Thurbinar's oquity beta is 1.00. b. Astume Thurbinars debt has a beta of zere. Estimste Thurbinar's unievored beta. Use the unlevered beta and the CAPM to estimale Thurbinar's unlevered cost of copital c. Estimale Thurbinar's equity cost of capital using the CAPM. Then assurne its debt cost of capital equals its yeld and using these rerults, estimate Thurbinar's uniovered cost of captal. d. Explain the deterence betoeen your estimate in part (b) and part (c). c. You decide to averege your tesults h part (b) and part (c), and thon aversge this result with your estimate from part (a) What is your estimate for the cost of captal of your fions's project? a. If your frimis proipct is as-equity financed, estenale ts cost of captail The projpchs cost of capied is (Found to two decimal pisces)