Please solve step by step. Thank you. This is a corporate finance based assignment.

1. J. Ross and Sons Inc. has a target capital structure that calls for 50 percent debt and 50 percent common equity. The company's only interest bearing debt is 10 year bond. The company's 10 year long-term bonds pay 8% semiannual coupon (that is, 4% of the principal will be paid every six months) and the bonds are currently sold at $1,200 and the par of the bond is $1,000. The firm can issue bonds only $10 million at this price. Beyond this amount, the firm can issue the bond at the same price, but the firm has to pay 9% semiannual coupon (that is, 4.5% of the principal will be paid every six months). Ross expects to have $15 million retained earnings. Ross' common stock currently sells for $30 per share, but if the firm issues new common stock the firm has to pay 10% flotation costs. The firm will pay a next dividend of $2 (D1=$2.00) per share on its common stock, and investors expect the dividend to grow indefinitely at a constant rate of 6 percent per year. The firm's tax rate is 30%. The company has a very lucrative new project and the project requires $35 million. What should be the WACC for this project? To answer the question, you must calculate break points of debt and retained earnings. (8 points) 2. Assume that a private company that you wish to value has 4 reasonable comparable publicly-traded competitors. However, each of these firms has a different capital structure which affects the equity beta. Estimate the equity cost of capital for the private company. Assume that the private firm has a D/S ratio of 1.5 and an effective tax rate of 30%. Current risk-free rate is 3.50% and market risk premium is 5%. For this problem, we use a current 10-year Treasury bond yield as risk-free rate and long-term (more than 80 years) historical market risk premium average (5%) as market risk premium. (7 points) Company #1 #2 #3 #4 Equity beta (levered beta) 1.20 1.50 1.10 0.90 Tax rate 0.32 0.37 0.39 0.27 D/S 1 0.8 0.55 0.48