Exercise #$3$: The tax rate is $30.$ Debt trades at $108,$ has $10$ years to maturity and has an annual coupon

of $6\%.$ The market value of debt is three times higher than that of equity. The cost of equity is $12\%.$

What is WACC?

WACC $=$

$6$

$\%(1\mathrm{.}5$pts$)$

The company is looking at a project with the IRR equal to $7\mathrm{.}8\%.$ Should the company accept it$?$

Accept? $...$yes$/$no$.$

$[7]$

$(0\mathrm{.}5$pts$)$