The common stock of Buildwell Conservation & Construction, Inc., has a beta of .80. The Treasury bill rate is 6%, and the market risk premium is estimated at 9%. BCCI’s capital structure is 25% debt, paying a 5% interest rate, and 75% equity. Buildwell pays tax at 40%.
a. What is BCCI’s cost of equity capital? (Round your answer to 2 decimal places.) Cost of equity capital %
b. What is BCCI’s WACC? (Round your answer to 2 decimal places.) WACC %