Copper Inc. (CI) and Nickel Inc. (NI) operate in the same industry, and they both encounter the same macroeconomic forces. For Cl and NI, the capital structure and expected operating earnings for a typical year, a good year, and a poor year, are as follows: Capital structure Common shares Bonds @ 10% CI $ 250,000 1,500,000 $1,750,000 NI $1,400,000 350,000 $1,750,000 Expected earnings before interest and taxes Typical year Good year Poor year Tax rate CI $225,000 $300,000 $165,000 35% NI $225,000 $300,000 $165,000 35% Required: a) Calculate the earnings available to the common shareholders and the returns on equity for Cl and NI for each of the three types of year. (6 marks) c) Explain whether Cl or NI should have the higher cost of equity in its capital structure. (1 mark)