businesses: in two businesses-cement and steel. You have been provided the following information on the You...

 

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businesses: in two businesses-cement and steel. You have been provided the following information on the You have been asked to evaluate the quality of investments at Megapolis Inc., a firm that operates Cement Steel Total Market value of assets (in millions) 1000 2 000 3 000 Unlevered beta of business 1.40 0.75 company's bonds have an A rating and a default spread (over risk free rate) of 3%. The risk-free rate The firm has 150 million shares, trading at $10 a share and faces a marginal tax rate of 40%. The is 2% and the equity risk premium is 6%. Estimate: a. Market value of equity (E) and market value of debt (D) b. Unlevered beta for the total firm (can be found as a weighted average) and then levered C. beta for the firm Cost of equity and debt d. Cost of capital (WACC) businesses: in two businesses-cement and steel. You have been provided the following information on the You have been asked to evaluate the quality of investments at Megapolis Inc., a firm that operates Cement Steel Total Market value of assets (in millions) 1000 2 000 3 000 Unlevered beta of business 1.40 0.75 company's bonds have an A rating and a default spread (over risk free rate) of 3%. The risk-free rate The firm has 150 million shares, trading at $10 a share and faces a marginal tax rate of 40%. The is 2% and the equity risk premium is 6%. Estimate: a. Market value of equity (E) and market value of debt (D) b. Unlevered beta for the total firm (can be found as a weighted average) and then levered C. beta for the firm Cost of equity and debt d. Cost of capital (WACC)