a$.$ If your firm's project is all$-$equity financed, estimate its cost of capital. share, with $16$ million shares outstanding. It also has $$109$ million in outstanding debt, with a yield on the debt of $4\mathrm{.}7\%.$ Thurbinar's equity beta is $1\mathrm{.}00.$

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.

d$.$ Explain the difference between your estimate in part $($b$)$ and part $($c$).$

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 decimal 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.$)$

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.$)$

B$.$ We should have gotten the same answer, the problem is the numbers in the problem are not consistent.

C$.$ The answers are actually the same; any difference is just due to rounding errors.

D$.$ The answers differ because we are using approximations rather than formulas that hold exactly.

The average unlevered cost of capital from part $($b$)$ and part $($c$)$ is $\%.($Round to two decimal places.$)$

The average unlevered cost of capital from part $($b$)$ and part $($c$)$ with part $($a$)$ is $\%.($Round to two decimal places.$)$