No. Operating FCF is measured before financing payments. WACC already incorporates the required debt return and the standard interest tax benefit. Deducting interest again would double count financing. Equity cash flows use a different definition and are discounted at the cost of equity.

The project must have the same systematic operating risk as the existing business and be financed under a compatible target debt/equity policy. Use market-value financing weights and after-tax debt cost. A project in a different business or with a different financing policy requires an adjusted rate or a separate APV valuation.

The valuation framework is appropriate, but the beta transfer is not. Unlever the comparable equity beta using the comparable capital structure and tax assumptions, then relever it at Epsilon’s leverage before applying CAPM. Using the lower-leverage equity beta directly understates Epsilon’s financial risk, other things equal.

Incomplete for levered equity valuation: add financing side effects separately under APV. Otherwise use an appropriate after-tax WACC before subtracting market debt.

Reasonable if operating risk is comparable and betas are properly unlevered. Removing financing risk is precisely the purpose of asset beta.

Appropriate if the rate matches project risk and financing policy, using market-value financing weights.

Only if its debt is effectively risk-free. Otherwise use its marginal required debt return, allowing for credit risk and term.

Incorrect. Unlever comparable equity betas and relever to Moscerino’s target market D/E, with consistent tax and debt-risk assumptions.