8 myla b.pearson.com 1) Do Homework - 31MyLab Ho... E FlN-336X4040 Multinational Corp Finance 22EW4 Roseazanna Gordon 03/16/22 8:18 AM ('3 Question 3, Problem 13-8 (algorithmic) ) Hw Score: 0%, o of 32 points Part1 off; 0 Points: 0 of 4 E Homework: 3-1 MyLab Homework WestGas Conveyance, Inc. WestGas Conveyance, Inc., is a large US. natural gas pipeline company that wants to raise $120 million to nance expansion. WestGas wants a capital structure that is 50% debt and 50% equity. Its corporate combined federal and state income tax rate is 38%. WestGas nds that it can nance in the domestic US. capital market at the rates listed in the popup window: a . Both debt and equity would have to be sold in multiples of $20 million, and these cost gures show the component costs, each, of debt and equity if raised 50% by debt and 50% by equity. A London bank advises WestGas that US. dollars could be raised in Europe at the following costs, also in multiples of $20 million, while maintaining the 50I50 capital structure. Each increment of cost would be inuenced by the total amount of capital raised. That is, if WestGas rst borrowed $20 million in the European market at 5% and matched this with an additional $20 million of equity, additional debt beyond this amount would cost 11% in the United States and 10% in Europe. The same relationship holds for equity nancing. a. Calculate the lowest average cost of capital for each increment of $40 million of new capital, where WestGas raises $20 million in the equity market 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 expansion be nanced? c. What will be the weighted average cost of capital for the expansion? a. If WestGas plans an expansion of $120 million, what is the lowest average cost of capital for the rst $40 million of new capital? % (Round to two decimal places.) Help me solve this View an example Get more help . AutoSave O OFF ~ A . G ... data-3_16_2022-8_19 AM.xIsx - Read-Only Q OP Home Insert Draw Page Layout Formulas Data Review View Tell me LE Share Comments Calibri V 11 AA =1 Wrap Text v General TIX Paste Merge & Center v v % 2 08 80 Conditional Format Cell Insert Delete Format Sort & Find & Analyze Formatting as lable Styles Filter Select Data J12 X V fx B C D E G H M N O P Q R S T U V W Costs of Raising Capital in the Market Cost ofDome Cost ofDome Cost ofEurope Cost ofEuropeanDebt Up to $40 million of new capital 13% 7% 15% 15% $41 million to $80 million of new capital 17% 11% 16% 10% Above $80 million 23% 16% 24% 17% 39 40 + Ready + 100% Wak 24 MAR 1 16 tv I