PLEASE COMPLETE USING EXCEL

Question 6: Ungearing and re-gearing the beta factors-Pure play mechanism (Assignment) Moe Inc. is in the manufacturing industry. The firm has 30 milion common stocks with par value of $5 per share. Each stock is trading at $16. The firm also has a 20-year zero coupon bond issued 5 years ago. The bond is currently trading at 47.674 and pays interest semi-annually. The firm's equity beta of 1.25. The company wants to diversify into the energy industry by acquiring Simi Inc. The acquisition will cost $200 million and will be financed as follows: 1jissue of 5.625 million stocks at the current stock price 2)Issue a 20-year, 44% coupon bond which pays interest semi-annually. Similar bonds are trading at 81.508 The interest rate on 20 year treasury bonds is 4% and the market premium is 8%. The tax rate is 20%. The average industry beta is 1.45 with Debt-to-Equity ratio of 0.6. Required a) What is the WACC of Moe Inc. b) What discounting rate (WACc) should be used to evaluate cash flows generated by Simi? Show all your computations and formulas used. ? show all the workings and the formulas you apply. IF