Chapter 13 Homework Problems.docx - Chapter 13 Homework...

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Chapter 13 Homework Problems #3, 4, 10, 19-22 3. WACC. Reactive Power Generation has the following capital structure. Its corporate tax rate is 35%. What is its WACC? 9.475% 6% 8
4. 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 40%. ( LO13-1 ) a.
b.
c. If BCCI is presented with a normal project with an internal rate of return of 12%,

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