WestGas Conveyance, Ine. WestGas Convoyance, Inc, is a large U.S. natural gas pipeline company that wants to raise $120 milion to finance expaneion, Weatoas Wants a capital structure that is 50% debt and 50% equity. Its corporate combined foderal and state income tax rate is 40%. WesiGas finds that it can finance in the domestic U.S. capital market at the ristes listed in the popup window. Both debt and equily would have to be sold in multiples of $20 millon, and these cost figures show the component costs, each, of debt and opuity if mised 50% by debt and 50% by oquily. A London bank advises WestGas that U S. dolars could be raised in Europe at the following costs, also in multiplos of $20 milion, while maintaining the 50/60 capital structure. Each increment of cost would be influenoed by the fotal amount of capital raisad. That is, if WestGas first borrowed $20 million in the European market at 7% and matched this with an add toral $20 milion of equity, additional debt beyond this amount would cost 12% in the United S tates and 10% in Europe. The same relationship halds for oquily financing. a. Calculate the lowest average cost of enpital for each increment of $40 million of new capital, where Wostcas naises 520 milicen in the equity markat and an additional $20 in the debt market at the same time. b. If WestGas plans an expansion of only $60 million, how should that expantion be fnanood? c. What will be the weighted average cont of capital for the oxpansion? a. If Westcas plans an expansion of $120 million, what is the lowest average cost of capitat for the first $40milion of naw capital? 16. (Round to two decimal places.) Data table (Click on the pricon to import the table into a spreadsheet.)