EMLL QULE llUl'l L': Bonanza BrothEIs Ltd mauufactmes leather saddles and has the ollom'ng capital structure 1which it consida's to he optimal under present and forecast conditions: _ Promrtion Used W Deht 400-1: Equity 5001': Total debt and equity- mus. Forthe coming year: the nancial manager Hose Cartwright expects after-tan earnings of 51.4 million Bonanza Brothels= past dividend polic1. ofpaying out 60 per cent of earnings 1will continue. Present commitments from its banker will allowBon-a Brothereto h-orrot'.r further amounts of nance according to the foowing schedule: Loan Amount Interest Rate $0 to 51:30,\" 90-3 $150,001 and ahot-'e 1101': BonanaaBrothers' taxationrate is40peroent. Thecurrentrnazetprioe ofitasharesisd. Its most recent dividend was $0.45 per share and the eapected growth rate in dividends is a constant 5 per cent pa" annuna- External equity cache sold at a otation cost of 10 per cent ofthearuomltraised. Bonanza Brothers has the following capital investment opporllmities forthe newt 313a: Project Cost Internal Rate Return A SWINE 15% pa B SIEMENS!) 155i: pa. (1 55(00):! 141% pa D $150,011] 12% pa. E 51.01101} 1 15"; pa. Quit-ed: a Calculatethehrealrpoints oftotalnancingassociatedwitheachsomceofcapitalfor BonanzaBrothers- {mi-5] h Calculate the costs of equity and debt capital associated with their respective total