Question: KT inc. is considering undertaking a new project. Based upon analysis of firms with similar projects, KT has determined that an unlevered cost of equity

KT inc. is considering undertaking a new project. Based upon analysis of firms with similar projects, KT has determined that an unlevered cost of equity of 12% is suitable for their project. KT's marginal tax rate is 35%, its borrowing rate is 7%, and KT does not believe that its borrowing rate will change if the new project is accepted.

If KT expects to maintain a debt to equity ratio for this project of 1, please calculate KT's equity cost of capital and WAC

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