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You have been asked to estimate the cost of capital for a power plant being...

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Finance

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You have been asked to estimate the cost of capital for a power plant being considered in Thailand by a U.S.-based utility. The plant will require an initial investment of $1 billion and will be independently finance using 60% debt (carrying an after-tax rate of 4.5% ) and 40% equity. The beta for power plants is expected to be 0.8, and the Treasury Bond rate is 7%. a. Estimate the cost of equity for this power plant, in U.S. dollars. b. Estimate the cost of capital for this power plant, in U.S. dollars. c. How would your analysis differ if it were done in the local currency

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