Your firm is planning to invest in an automated packaging plant. Harburtin Industries is an all-equity firm that specializes in this business. Suppose Harburtin's equity beta is 0.89, the risk-free rate is 4%, and the market risk premium is 4%. a. If your firm's project is all-equity financed, estimate its cost of capital. The project's cost of capital is \%. (Round to two defoimal places.) b. Assume Thurbinar's debt has a beta of zero. Estimate Thurbinar's unlevered beta. Use the unlevered beta and the CAPM to estimate Thurbinar's unlevered cost of capital. Thurbinar's unlevered beta is . (Round to two decimal places.) Thurbinar's unlevered cost of capital is \%. (Round to two decimal places.) c. Estimate Thurbinar's equity cost of capital using the CAPM. Then assume its debt cost of capital equals its yield and using these results, estimate Thurbinar's unlevered cost of capital. Thurbinar's equity cost of capital is \%. (Round to two decimal places.) Thurbinar's unlevered cost of capital is \%. (Round to two decimal places.) d. Explain the difference between your estimate in part (b) and part (c). (Select the best choice below.) A. The answers differ because we are using approximations rather than formulas that hold exactly. B. In the first case, we assumed the debt had a beta of zero so we assumed the cost of debt was the riskless rate, while in the second case we assumed the cost of debt was the yield on debt. C. The answers are actually the same; any difference is just due to rounding errors. D. We should have gotten the same answer, the problem is the numbers in the problem are not consistent. Your firm is planning to invest in an automated packaging plant. Harburtin Industries is an all-equity firm that specializes in this business. Suppose Harburtin's equity beta is 0.89, the risk-free rate is 4%, and the market risk premium is 4%. a. If your firm's project is all-equity financed, estimate its cost of capital. The project's cost of capital is \%. (Round to two defoimal places.) b. Assume Thurbinar's debt has a beta of zero. Estimate Thurbinar's unlevered beta. Use the unlevered beta and the CAPM to estimate Thurbinar's unlevered cost of capital. Thurbinar's unlevered beta is . (Round to two decimal places.) Thurbinar's unlevered cost of capital is \%. (Round to two decimal places.) c. Estimate Thurbinar's equity cost of capital using the CAPM. Then assume its debt cost of capital equals its yield and using these results, estimate Thurbinar's unlevered cost of capital. Thurbinar's equity cost of capital is \%. (Round to two decimal places.) Thurbinar's unlevered cost of capital is \%. (Round to two decimal places.) d. Explain the difference between your estimate in part (b) and part (c). (Select the best choice below.) A. The answers differ because we are using approximations rather than formulas that hold exactly. B. In the first case, we assumed the debt had a beta of zero so we assumed the cost of debt was the riskless rate, while in the second case we assumed the cost of debt was the yield on debt. C. The answers are actually the same; any difference is just due to rounding errors. D. We should have gotten the same answer, the problem is the numbers in the problem are not consistent