Question: Clarus Corp is a company that operates in two businesses, steel and technology, and in two countries, the US and Brazil. me table IRIow

Clarus Corp is a company that operates in two businesses, steel and technology, and in two countries, the US and Brazil. me table IRIow summarizes the revenues by (in millions): sgcooo S6CODO SIAOODO SACO oo S3C000 S7C000 $900 m You have estimated unlevered betas of for steel and I .20 for technology and equity risk premiums of for the US and for Brazil. The US Treasury bond rate is and the Brazilian S denominated bond rate is Clarus Corp has 315 million shares , trading at SIO/share, g d in nn I-nIanre.Thecorporate marginal tax rate is 40%. a. If you assume that I the USS cost of capital for Clarus- (2 points) b. Now assume that Clarus plans to borrow Sl.2 billion at 5% (pre-tax) to pay a special dividend of S450 million and to reinvest the rest ($750 million) in its technology business in Brazil. Estimate the cosV.fgapitaJfocusompanyIAJSS after the debt issue and expan Sian. (4 points)

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