Suppose Alcatel-Lucent has an equity cost of capital of 10.7%, market capitalization of $10.50 billion, and an enterprise value of $15 billion. Suppose Alcatel-Lucent's debt cost of capital is 7.3% and its marginal tax rate is 35%.

a. What is Alcatel-Lucent's WACC?

Alcatel-Lucent's WACC is ___% (round to 2 decimal places)

b. If Alcatel-Lucent maintains a constant debt-equity ratio, what is the value of a project with average risk and the expected free cash flows as shown here:

Year	0	1	2	3
FCF ($ million)	-100	50	96	69

The NPV of the project is: $_____ million (round to 2 decimal places)

c. If Alcatel-Lucent maintains its debt-equity ratio, what is the debt capacity of the project in part (b)? (round to 2 decimal places)

Year	0	1	2	3
Debt Capacity	$___ million	$___ million	$___ million	$___ million