L.andlock Real Estate is a Chinese property developer and has the following capital structure: The afpropriate eorporate tax rate is 30%. The market riss premitms is 6% while the risk-free rate is 3%. Assume the CAPM bolds. Landlosk is considering diversifying into property managemens of its developed properties. This requires an initial investment of $.5 million to be financed internally, and will generate zero cashflow for Years 1 and 2 , after-lax eashflow of $500,000 from Year 3 , with a growth of 3% per year forever. Listed property management firms have a beta of 0.3, and are debt free. L.andlock: finance trainee David said that the proposed project has a negative NPV: a. Assess the capital structure of Landlock on a market valne basis. (10 makiss) b. Calculate the weighted average cost of expital (WACC) of Laadiock. (12 makks) c. Is the riss: of the property management project the sane as that of Landlock? Shotid Landlock underthke this new project based on the XPX s inalysis? Jnstify your answer- d. A survey shows that the most conmonly used discount rate in capital budgeting is (11 marks) the company's cost of capital. Discuss the peos and cons of using the WACC for capital budiecting decisions. (7 marks)