1. Reactive Power Generation is considering to invest in new project with a return of 10 percent. They have gathered the following information: Preferred shares are currently selling at $15 per shares and pay dividend of $2 per share. The common share sells for $20 per share and has a beta of 0.8. There are 1 million common shares outstanding. The market return is 16 percent while the risk-free rate is 6 percent, and the firm are in 40 percent in tax bracket. The company also issue bond with par value of $1,000 and 8 percent coupon rate annual payment. The bond has 10 years maturity with the currently selling at $889. Based on the information given: a. Compute the cost of debt after tax. (7 marks) b. Compute the cost of preferred shares. (3 marks) c. Compute the cost of common shares. (4 marks) d. Calculate the weighted average cost of capital (WACC) using the capital structure weights shown in the following table. Should Reactive accept the project