5. Lightning Power Co. is a vertically integrated power generator and distributor on St. Barts's island. The company's tax rate is 35 percent. The following information was extracted from the firm's financial statements. Debt: 8,0006.5 percent coupon bonds outstanding, $1,000 par value, 25 years to maturity, selling for 106 percent of par; the bonds make semi-annual payments. Common stock: 310,000 shares outstanding, selling for $57 per share; the beta is 1.05 . Preferred stock: 15,000 shares of 4 percent preferred stock outstanding, currently selling for $72 per share. Market: 7 percent market risk premium and 4.5 percent risk-free rate. Required: a. What is the firm's cost of common equity? (3 marks) b. What is the firm's after-tax cost of debt? ( 4 marks) c. What is the market value for each element in the firm's capital structure? (6 marks) d. If Lightning Co. is evaluating a new investment project that has the same risk as the firm's typical project, what rate should the firm use to discount the project's cash flows? (7 marks)