What is the 'project' cost of capital? How is it different from the corporate cost of capital?

2. Estimate the weighted cost of debt of the Thunderbird project under the assumption that (i) the financing provided by NAIF is at a margin of 5% to 90-day BBSY, (ii) 90 day BBSY is 2.92%, (iii) SOFR is 3.05%, and (iii) The average annual sales revenue from the Thunderbird project is $467 million.

3. Bloomberg estimates the equity beta of Sheffield at 0.62. Why might Olivia think this is not a credible estimate of the Thunderbird project beta?

Answer rating: 100% (QA)

1 The project cost of capital refers to the required rate of return or the discount rate that is used to evaluate the feasibility of a specific investment project or capital expenditure It represents ... View the full answer