QUESTION 4 8 points Save Answer = In your responses, please type (A) and (B) to differentiate the parts of your answers. Dewey, Cheatem, and Howe, a leading publisher of finance textbooks, currently has the following capital structure. market value of debt 375,000 face value of debt 500,000 market value of equity 625,000 beta of debt 0 beta of equity 1.6 Suppose the firm is considering a new edition of its Principles of Corporate Finance textbook. The following are expected marginal cash flows: Period Expected cash flows 0 -100,000 1 +100,000 2 +200,000 Assume that the firm can borrow 100,000 to finance the project at competitive terms, which involves promising to repay 120,000 in year two, with no intermediate interest payments. Assume no taxes. Other information: expected market return = 13%/year riskless rate of interest = 3%/year correlation between new project cash flows and company's other projects = 1 (A) What is the firm's cost of capital before the project? After the project? (3 pts) (B) What is the market value before the project is taken? After? (5 pts)