Suppose stock in Wesley Corporation has a beta of 0.90. The market return is 11 percent, and the Treasury Bill rate is 5 percent. Wesley's last dividend was 1.40 per share, and the dividend is expected to grow at 6 percent indefinitely. The stock currently sells for 47 per share. Wesley's target capital structure is 1/3 debt and 2/3 equity. Its cost of debt is 10 percent before taxes. Its tax rate is 25 percent. Instructions: a. What is Wesley's cost of equity capital? Assume that you equally believe in the CAPM approach and the dividend growth model. (10 points) b. What is Wesley's WACC? (5 points) c. Wesley is seeking 20 million for a new project. The necessary funds will have to be raised externally. Wesley's flotation costs for selling debt and equity are 3 percent and 14 percent, respectively. If flotation costs are considered, what is the true cost of the new project? (10 points)