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Gnomes R Us is considering a new project The company has a debt equity ratio of 75 The companyAc cs cost of equity is 149 percent and the aftertax cost of debt is 82 percent The firm feels

Gnomes R Us is considering a new project. The company has a debt-equity ratio of .75. The companyAc€?cs cost of equity is 14.9 percent, and the aftertax cost of debt is 8.2 percent. The firm feels that the project is riskier than the company as a whole and that it should use an adjustment factor of +2 percent.

Requirement 1:

What is the companyAc€?cs WACC? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

  WACC ????  
Requirement 2:

What discount rate should the firm use for the project? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

  Project discount rate ????

Apr 30 2020 View more View Less

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