The case which full name is "Northern Forest Products Case: Risk Adjusted Rate of Return and Divisional hurdle Rates" is attached below for your perusal.
Before approaching the questions that you have requested help with, let me start by giving you a brief overview of the capital budgeting process, especially as it relates to capital structure, cost of equity, cost of debt and the weighted average cost of capital. The capital structure of a corporation is the way in which it decides to finance its assets through a combination of either debt and/or equity. Note the following excerpt:
"The capital structure is how a firm finances its overall operations and ...
This solution provides information that may used to assist in answering question 4, 5 and 6 of the Northern Forest Case. Before doing this however, an overview of the capital budgeting process, especially as it relates to capital structure, cost of equity, cost of debt and the weighted average cost of capital was given. These notes will not only assist you with answering this case - but can also help you to answer other capital budgeting questions. The solution has been adequately referenced. (The response itself contains 1,572 words plus an excel file with computations.)