Hula Enterprises is considering a new project to produce solarwater heaters. The finance manager wishes to find an appropriaterisk adjusted discount rate for the project. The (equity) beta ofHot Water, a firm currently producing solar water heaters, is 1.6.Hot Water has a debt to total value ratio of 0.4. The expectedreturn on the market is 0.14, and the riskfree rate is 0.05.Suppose the corporate tax rate is 38 percent. Assume that debt isriskless throughout this problem. (Roundyour answers to 2 decimal places. (e.g., 0.16))

a.	The expected return on the unlevered equity (return on asset,R0) for the solar water heater projectis  %.
b.	If Hula is an equity financed firm, the weighted average costof capital for the project is  %.
c.	If Hula has a debt to equity ratio of 2, the weighted averagecost of capital for the project is  %.
d.	The finance manager believes that the solar water heaterproject can support 10 cents of debt for every dollar of assetvalue, i.e., the debt capacity is 10 cents for every dollar ofasset value. Hence she is not sure that the debt to equity ratio of2 used in the weighted average cost of capital calculation isvalid. Based on her belief, the appropriate debt ratio to useis  %. The weighted average cost of capital that you willarrive at with this capital structure is