Question: A project is financed with 75% debt and 25% equity. You are given: (i) The risk-free interest rate is 0.04. (ii) The market risk

A project is financed with 75% debt and 25% equity. You are

A project is financed with 75% debt and 25% equity. You are given: (i) The risk-free interest rate is 0.04. (ii) The market risk premium is 0.06. (iii) Beta for the project's equity is 1.5. (iv) Beta for the project's debt is 0.1. Calculate the unlevered cost of capital.

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