Tesla Manufacturing Companys current capital structure is comprised of 30% debt and 70% equity (based on market values). Teslas equity beta (based on its current level of debt financing) is 1.20, and its debt beta is 0.35. Also, the risk-free rate of interest is currently 4.5% on long-term government bonds. Teslas investment banker advised the firm that, according to her estimates, the market risk premium is 5.5%. a. What is your estimate of the cost of equity capital for Tesla (based on the CAPM)? b. If Teslas marginal tax rate is 35%, what is the firms overall weighted average cost of capital (WACC)? c. Tesla is considering a major expansion of its current business operations. The firms investment banker estimates that Tesla will be able to borrow up to 40% of the needed funds and maintain its current credit rating and borrowing cost. Estimate the WACC for this project.