Please answer this for me in Excel.

You work at a private equity firm that is considering investing in the green$-$technology sector.

You are trying to calculate the cost of capital to apply to valuing green$-$technology firms.

Unfortunately, there are currently no publicly traded companies that are only in the greentechnology

sector. However, you have the following information about two publicly traded

companies.

Company Lambda has two divisions, a nanotechnology division, and a green$-$technology

division.

$$ Company Lambda$$s nanotechnology division has an estimated value of $$1$ billion.

$$ Company Lambda$$s other division, its green$-$technology division, has an estimated value

of $$1\mathrm{.}5$ billion.

$$ Company Lambda$$s debt$/$value ratio is $87\mathrm{.}5\%.$

$$ Company Lambda$$s equity beta is very high, at $15,$ and its debt beta is $0\mathrm{.}5.$

Company Gamma is only in nanotechnology, the same nanotechnology sector as company

Lambda.

$$ Company Gamma has no cash or debt.

$$ Company Gamma$$s equity beta is $1\mathrm{.}02.$

Assume that the CAPM holds. The risk$-$free rate is $4\%$ and the market risk premium is $8\%.$

$1)$ What is the asset beta for company Lambda? $(1$ Point$)$

$2)$ What is the cost of capital that you should use to value green$-$technology projects? $(1$

Point$)$ Given:

$\backslash$begin$\{$tabular$\}\{$l$|$l$\}$

$\backslash$hline Risk$-$free rate & $\backslash (4\backslash \%\backslash )\backslash \backslash$

$\backslash$hline Market risk premiun & $\backslash (8\backslash \%\backslash )\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$

$\backslash$begin$\{$tabular$\}\{|$l$|$r$|\}$

$\backslash$hline Lambda & $\backslash \backslash$

$\backslash$hline Nano value $\backslash ((\backslash$$ B$)\backslash )$ & $1\backslash \backslash$

$\backslash$hline Green value $\backslash ((\backslash$$ B$)\backslash )$ & $1\mathrm{.}5\backslash \backslash$

$\backslash$hline beta$\_$E & $15\backslash \backslash$

$\backslash$hline beta$\_$D & $0\mathrm{.}5\backslash \backslash$

$\backslash$hline D$/$V & $\backslash (87\mathrm{.}5\backslash \%\backslash )\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$

$\backslash$begin$\{$tabular$\}\{|$l$|$r$|\}$

$\backslash$hline Gamma & $\backslash \backslash$

$\backslash$hline beta$\_$E & $1\mathrm{.}02\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$