METRA is considering building a new train line from Chicago to Utopia. Use the following information to help Metra determine their cost of capital to assess the project:

• Debt totals $150 million with a 5% coupon, and was just issued (YTM = 5%), but at a premium of 2%
• Common stock (14 million shares outstanding) now trade at $25 per share
• The common stock will pay an annual dividend of $1.20 this year, and is growing at 3% per year
• METRA pays a corporate tax rate of 21%.
• The risk-free rate is 3%, the excess market return is 9%
• Metras common stock Beta is 1.4

1. What debt and equity weights will Metra use to calculate WACC?
2. What is METRAs cost of debt?
3. What is METRAs cost of common equity?
4. What is METRAs WACC?
5. Under what circumstances would it make sense for METRA to make the investment if it returns less than their cost of capital (WACC)?