The financial manager of Australia Co. needs to estimate the cost of capital to apply in the valuation of one of the firm's investment opportunities named Project Kangaroo. The capital structure of Australia Co. currently consists of 30% debt (debt to market value ratio). The corresponding costs of debt and equity are 9% and 15% respectively. Moreover, the firm is subject to a tax rate of 35%. The debt capacity associated with Project Kangaroo is 60% and its associated cost of debt of 10%. a) What is the opportunity cost of capital for Australia Co.? [1 mark] b) What is the new cost of equity? [2 marks] c) What is an appropriate weighted average cost of capital (WACC) after-tax that Australia Co. should apply to value Project Kangaroo? [2 marks] d) Is this cost of capital higher or lower compared to the original rate faced by Australia Co.? Explain. [5 marks]