The cost of equity in a geared company: Keg=Rf+(Rm-Rf) Be

THe cost of equity in an ungeared company:Keu=Rf+(Rm-Rf) Ba

B asset = Bequity* E/ ((E+D*(1-t))

Steps:

1. Calculate Ba of the new project in new industry
2. Calculate the Be equity beta of the new project
3.Using the CAPM formula to calculate the Ke (project specific equity discount rate)
4. Calculate Kdat
5. Calculate the adjusted WACC