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Target Corp has a current price of $73. It also has 521 million shares outstanding and...

Target Corp has a current price of $73. It also has 521 million shares outstanding and the market value of debt is $11,317 million. The company’s equity beta is 0.72. Its tax rate is 20%. Assume that the risk-free rate is 2.5% and the market return is 10%. The company’s cost of debt is 4.2%.   

  1. Compute the weighted average cost of capital (WACC) for Target Corp.If an investment
  2. project.generates a return of 10% and has similar risk level as the overall company, should Target Corp accept this project? Why or why not?
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