given the following info on a private restaurant best-in-town BIT , operating in an upscale shopping mall:

Typical simplified balance sheet for restaurant industry:

Total assets 250Million$ Total liabilities 150M

Total equity 100M$

Also, you gathered:

beta ( industry )= 1.60

rho ( industry)= 0.85

average tax cost of borrowing for rest industry is 7%

one month t bill yield 2%

market risk premium 6%

what is the equity cost of BIT?

a)13.7% b)12.7% c)12.3% d)11,7% e)13.3%

what is the wacc you would use to carry out this dcf analysis?

a)9.7% b)10.5% c)8.7% d)9.5% e)9.3%

assume further that you expect BIT would only operate for 12 years and the future becomes unknown what would be the maximum offer you would make?

a)3.60M b)3.10M c)4.60M d)2.70M e)2.90M