3. Clams Partners is studying various potential capital structures. The table below shows their cost of equity and cost of debt for different debt ratios. [As we'll see in later chapters. the costs of debt and equity can change as the capital structure does} Assuming their tax rate is 40%, and that Dates wants to minimize its cost of capital, what capital structure should the rm choose? What will the weighted average cost of capital {WAGE} be at that point? [Note: the company does not have any preferred stock] Debt Ratio Cost of '- . of ca + Ital structure that is debt - Debt \" 14.29% 14.6% 15-49% 4. Godfrey-Bywowanus is considering a new five-year project to upgrade manufacturing facilities, a project whose risl: will be similar to the current risl: of the overall rm. The project will cost $1,9DD,DDD immediately, but will then produce $300,00D in after-tax cash ow in year one. That cash ow will then grow by SIDEDDD per year for the rest of the project [meaning that the cash flow in year ve will be STORED}; there will be no salvage value in the project after the ve years. The rm has a target capital structure of Z debt and anti; equity, and its current cost of debt is 5%. The risk free rate is 396. the market risk premium is 895, and the rm's beta is 1.25. Assuming a tax rate of 41095, what is the NP'v" of this project? Should Godfrey approve it