a) Explain the differences in the valuation process of a matured company and bank. (6 marks) b) Company BBB is one of Country B's largest housing developer. BBB has 150 million ordinary B$1 shares in issue (where B$ is Country B's currency). The shares are currently trading at B$12.83 per share. The beta of the company's equity is estimated to be 0.8. Risk free rate and market risk premium are 2% and 7.5%, respectively. BBB also has the following debt finance: . B$300 million floating rate bank loan maturing in 8 years' time with annual interest set at 12-month interbank rates plus 2%. The 12-month interbank rate is currently 3% per annum. B$500 million of bonds currently trading at B$ 105 and a yield of 5%. . BBB pays corporate income tax at a rate of 33% on taxable profits. The consultants have completed a full review of historical financial data for both BBB and the wider house-building industry and have estimated that the theoretical gearing level (debt to total value) at which Weighted Average Cost of Capital (WACC) is minimised at around 56% for BBB. i. Calculate BBB's current WACC. (7 marks) WACC = _ka(1-Tm)+-ke ii. Assuming all else equal, calculate BBB's revised WACC if gearing were to be decreased to 56%. (8 marks) Be = 1 + - B . be = but ( b - ba) E c) You have estimated the NOPLAT for each of the departments in a three-division firm at $15, $5, and $80 million, respectively, for Department A, B, and C. Using these values, you assume that Department A, B, and C contribute 15, 5 and 80 percent, respectively, to its overall firm value. S this an appropriate valuation technique? Why or why not? (4 marks)