You have the following initial information on CMR Co. on which to base your calculations and discussion for questions 1) and 2): . Current long-term and target debt-equity ratio (D:E) = 1:4 0 Corporate tax rate (TC) = 30% 0 Expected Inflation = 1.75% . Equity beta (IE) = 1.6385 . Debt beta (ID) = 0.2055 0 Expected market premium [rM rF) = 6.00% . Risk-free rate (rF) = 2.15% 2) Assume now a firm that is an existing customer of CMR Co. is considering a buyout of CMR Co. to allow them to integrate production activities. The potential acquiring firm's management has approached an investment bank for advice. The bank believes that the firm can gear CMR Co. to a higher level, given that its existing management has been highly conservative in its use of debt. It also notes that the customer's firm has the same cost of debt as that of CMR Co. Thus, it has suggested use of a target debtequity ratio of 2:6 when undertaking valuation calculations. a) What would the required rate of return for BFS Co.'s equity become if the proposed gearing structure were adopted following acquisition by the customer? (2 marks) b) Would the above project described in 1) be viable for the new owner of BFS Co.? Justify your answer (numerically)