A. Midwest Limited believes that its optimal capital structure consists of 60% common equity and 40% debt, and its tax rate is 35%. Midwest must raise additional capital to fund its upcoming project. Midwest can raise up to $1.5 million of debt at an interest rate of 12% and an additional S4 million of debt at 14%. The firm will have $2.5 million of retained earnings with a cost of 10%. The company's stock is currently sells at $20. The company is also expected to pay a dividend of $2 at the end of the current year. If the company issued new stock, it would incur a 20% flotation cost with a constant growth rate of 6% per year. New common stock in an amount up to $8 million. Furthermore, The CFO estimates that a proposed expansion would require an investment of $7.5 million. What is the WACC for the last dollar raised to complete the project? If the risk of the project is same as the existing assets of the company and the rate of return is 15%, should Midwest accept the project? Why or Why not? (8 marks)