Suppose Alcatel-Lucent has an equity cost of capital of 10.9 %, market capitalization of $ 11.52 billion, and an enterprise value of $ 16billion. Suppose Alcatel-Lucent's debt cost of capital is 7.4 % and its marginal tax rate is 37 %

.a. What is Alcatel-Lucent's WACC?

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?

c. If Alcatel-Lucent maintains its debt-equity ratio, what is the debt capacity of the project in part

(b)?The debt capacity of the project in part b) is as follows:(Round to two decimal places.)

0 Year FCF ($ million) 1 53 2 104 - 100 75 Year 0 1 2 3 Debt capacity $ million million million $ million