The common stock of Buildwell Conservation & Construction, Inc., has a beta of .80. The Treasury bill
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Question:
The common stock of Buildwell Conservation & Construction, Inc., has a beta of .80. The Treasury bill rate is 3%, and the market risk premium is estimated at 7%. BCCI's capital structure is 20% debt, paying a 4% interest rate, and 80% equity. Buildwell pays tax at 30%.
a. What is BCCI's cost of equity capital?
b. What is BCCI's WACC?
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0078034640
7th edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
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