You have the following information about Burgundy Basins, a sink manufacturer. Equity shares outstanding 20 million Stock price per share $40.00 Yield to maturity on debt 7.5% Book value of interest bearing debt $320 million Coupon interest rate on debt 4.8% Market value of debt $290 million Book value of equity $500 million Cost of equity capital 14% Tax rate 35% Burgundy is contemplating what for the company is an average-risk investment costing $40 million and promising an annual after-tax cash flow of $6.4 million in perpetuity. a. What is the internal rate of return on the investment? b. That is Burgundys weighted-average cost of capital? c. If undertaken, would you expect this investment to benefit shareholders? Why or Why not? #8