Staedtler is a MNC with a corporate-wide long-term debt to equity ratio of 0.65. Staedtler prefers to issue corporate bonds at a post-tax cost of 8.32%, and a cost of common equity capital of 17.39%. Suppose that the marginal tax rate is 15%. The MNC is interested in pursuing an offshore project. The debt capacity of the offshore project is 30% and the required return on equity is 12.44% stemming from a levered beta of 0.40154. 

What is the weighted average cost of capital (WACC) of the project?

What is the unlevered beta of the project?

Answer rating: 100% (QA)

To calculate the WACC of the project we need to find the cost of equity and the cost of deb... View the full answer