(Solved): WACC. The common stock of Buildwell Conservation \& Construction Inc. (BCCI) has a beta of 9. The T ...

WACC. The common stock of Buildwell Conservation \& Construction Inc. (BCCI) has a beta of 9. The Treasury bill rate is $$4\%$$, and the market risk premium is estimated at $$8\%$$. BCCI's capital structure is $$30\%$$ debt, paying a $$5\%$$ interest rate, and $$70\%$$ equity. Buildwell pays tax at $$21\%$$. (LOI3-L) 1. What is BCCI's cost of equity capital? 2. What is its WACC? 3. If $$\mathrm{BCCI}$$ is presented with a normal project with an internal rate of return of $$12\%$$, should it accept the project?