SpaceX is considering adding a new hub operation on Mars. The finance group at SpaceX has gathered the following data. They have hired you as a Finance consultant to help them determine their cost of capital.

• Total Enterprise Value is $24 billion
• Current stock sells at $80 per share with 200 million shares outstanding
• Debt was issued with a 4% coupon, five years ago and is now trading at 98.5.
• SpaceX is introducing an annual dividend of $1.40 this year, growing at 4% per year
• The current risk free rate is 2%, SpaceXs Beta is 2.5, the market premium is 7%
• SpaceX pays a corporate tax rate of 25%

1. What debt and equity weights will SpaceX use to calculate WACC?
2. What is SpaceXs cost of debt?
3. What is SpaceXs cost of common equity?
4. What is SpaceXs WACC?
5. Under what circumstances might it make sense for SpaceX to make the investment if it returns less than their cost of capital (WACC)?