This project will require $ 14 million initial investment and is expected to generate volatile cash flow during the first three years. It is expected to generate volatile cash flow the three first years. Cash grow is expected to grow at a constant rate 3% per year after year four The company's current balance sheet is $2 billion debt in book value and the debt is trading at 80% of book value. The debt beta is 0.6 the market value of equity of the company is 4.8 billion and the equity beta is 1.75. It has been stable and the company will issue ten million new debt at the current borrowing cost to take the new investment project. The company plans to gradually reduce borrowing in the first 3 years and then return to its previous stable capital structure. Debt repayment schedule is given below. Assume the corporate tax rate is 21%. Suppose the risk free rate is 2% and the market risk return is 10%. The underwritten charges of 1.5% of the debt issue as their total commission. One through three years after tax cash flow estimated are given 0 1 2 3 Cashflow forecast in $M -14.0 2.0 3.0 3.7 After tax cash flow 10.0 9.0 8.5 6.5 Debt Balance at yr end (SM) A. What is the unlevered beta of the company and the return on assets? B. Calculate the levered cost of capital (return on equity) and after-tax WACC for peri with stable capital structure