No calculations are needed, just explain. (9-17) WACC Estimation On January 1, the total market value of Finestone Countertops Co. was $60 million. During the year, the company plans to raise and invest $30 million in new projects. The firm's present market value capital structure, shown here, is considered to be optimal. There is no short-term debt. Debt Common equity Total capital $30,000,000 30,000,000 $60,000,000 New bonds will have an 8% coupon rate, and they will be sold at par. Common stock is currently selling at $30 a share. The shareholders' required rate of return consists of a dividend yield of 4% and an expected constant growth rate of 8%. The corporate tax rate is 30%. a. To maintain the present capital structure, how much of the new investment must be financed by common equity? b. Assume that there is sufficient cash flow such that Finestone can maintain its target capital structure without issuing additional shares of equity. What is the WACC? c. Suppose now that there is not enough internal cash flow and that the firm must issue new shares of stock. Qualitatively speaking, what will happen to the WACC?