Please use the same format shown in the photo and show the excel formulas

D E F G H Question Three: WACC and Portfolio beta CHITANGO MARKET D WNH Three Parts: 25 points Formula Dormula Do not share your exam Beta 1.8 26 Part A: Consider the following data conceming Abby Company Portfolio weights 10 00 V O What is the company cost of equity? Find the company WACC Formula 0.3 Dormula 0.7 10 11 Portfolio beta 12 13 Abby Company WACC 14 E(TM ) 10% 15 Cost of debt, rD 7% 16 Corporate tax rate, To 35% Part C: Formula and Dormula are two stocks listed on the 17 Cov (ADDYI'M) 0.13 Chitango stock market. Their betas are 1.8 and 2.6, 18 Debt, D 1,750,000 respectively. What is the beta of a portfolio invested 20% in 19 Var(TM) 0.11 Formula and 80 % in Dormula? 20 Risk-free rate, r 2% 21 Equity, E 3,250,000 22 23 Section a. Finding the company cost of equity. 24 Equity beta, B 25 Cost of equity, re 26 27 Section b. Finding the company WACC. 28 V=D+E 29 WACC 30 31 32 33 Part B: Finding the expected return using the Gordon Model: 34 35 Consider the following data. Calculate the company cost of equity. 36 What is the P/E ratio? 37 38 39 Finding the expected return using the Gordon model 40 Po $11.00 Stock price today 41 40% Dividend payout ratio 42 g 6.00% Annual dividend growth rate 43 EPSo $0.45 Earnings per share 44 45 46 E(re ) 47 48 P/E ratio 49