$5.$ Intel is exploring a joint venture with Ford to develop computer chips to use in automobile. Althought Intel has traditionally used a cost of equity based on its beta of $1\mathrm{.}50$ and a cost of capital based on its debt ratio of $5\%,$ it is examining whether it should use a different approach for this project. It has collected the following information.

$$ The average beta for automobile component firms is $0\mathrm{.}90,$ and the average debt$/$equity ratio across these firms is $40\%.$

$$ The joint venture will be financed $70\%$ with equity from Ford and Intel, and $30\%$ with new debt raised at a market interest rate of $7\mathrm{.}5\%$

a$.$ Estimate the beta that Intel should use for this project.

b$.$ Estimate the cost of capital that Intel should use for this project.

c$.$ What wuold be the consequences of Intel using its current cost of equity and capital on this project?