WestCo Ltd (WTC) is a publicly traded company with a current share price of $33 per share and had 14 million shares outstanding. WTC had just paid $1.87 per share in dividends and the dividends are expected to grow by 6% per year in the future. WTC's long-term debt consists of 14% bonds issued with a face value of $70 million, paying semi-annual coupons. These bonds have exactly 6 years to maturity with 12 coupons to be paid. The market yield on the bonds is quoted at 11% p.a. Its equity consists entirely of ordinary shares. The beta of WTC is 1.54, the risk-free rate is 2%, and the market risk premium is 6.5%. The corporate tax rate is 30%.

A. Calculate the market value of equity and market value of debt for WestCo Ltd?

B. Calculate WestCo's cost of equity and after-tax cost of debt?

C. What is WestCo's weighted average cost of capital (WACC)?

D. WestCo is planning to extend their existing business overseas. The project costs $10mil now. WestCo expects that starting from year 1, the annual Free Cash Flows (FCF) will grow at a constant rate of 3% forever. What is the minimum first year Free Cash Flows so that WestCo will accept this project?