Peter Johnson, the CFO of Homer Industries, Inc is
trying to determine the Weighted Cost of Capital (WACC) based on two different capital structures under consideration to fund a new project. Assume the company's tax rate is 30%.

Two different capital structures are cost of capital and tax rate to fund a new project.

Explanation:

Cost of capital is defined as an opportunity cost that is used for making certain investments. Cost of capital also acts as a rate of return based on a particular investment. Cost of capital is very important it helps in dealing with the budget of a particular project, evaluating all the investments. Cost of capital is calculated by multiplying debt or equity by relevant weight. Effective tax rate can be defined as tax paid/tax income.

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the business rule that governs the relationship is one-to-many as there are multiple customers for each agent.