DEI inc. is setting up a manufacturing plant overseas to produce a new line of electronic appliances. This will be a 7 year project. The company bought a building several years ago for $5 million in anticipation of using it fora project that was never undertaken, and the building was completely depreciated. Today's market value for the building is $4.1 million. The company wants to situate its new plant in this building. Beside the use of the building, the set-up of the plant will require an additional amount of $25 million to acquire new fixed assets that will be depreciated straight-line through the life of the project. The following are the current market data for DEI securities: Debt: $240,000,000 with a 7.5% interest rate, and the debt amount is kept constant. Common stocks: 9,500,000 shares outstanding, selling 738 each. The levered equity Bet.a is 1.2. Market: 8% expected market risk premium, 5% risk free rate. DEI uses G. M. Wharton as its lead underwriter. Wharton charges DEI spreads of 8% on new common stock issues. Wharton has recommended that DEI raises the