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WACC

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The common stock of Buildwell Conservation & Construction, Inc., has a beta of .80. The Treasury bill rate is 4 percent and the market risk premium is estimated at 8 percent. BCCI's capital structure is 30 percent debt paying a 5 percent interest rate, and 70 percent equity. What is BCCI's cost of equity capital? It's WACC? Buildwell pays no taxes.

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The solution answers the question below and goes into quite a bit of detail regarding WACC. The answer is ideal for students looking for a detailed analysis of the question asked below. An excellent response to the question being asked.

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Cost of Equity Capital = Rf+B*Market Premium
=> Cost of Equity ...

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