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Buhoo is an Egyplian company. The outcome of a regression of Buhoo monthly stock returns against market monthly retums is as follows:

$()Buhoo()2$

Buhoo is considering investing in the magazine business. The average beta of firms specializing in the magazine business is $1\mathrm{.}4,$ and these firms have an average debt$-$to$-$equity ratio of $25\%$; they face an average tax rate of $35\%.$ Estimate the business risk $($unlevered beta$)$ for the magazine business.

Buhoo expects that half of its future revenues and earnings will come from the magazine business. Estimate the unlevered beta for Buhoo looking forward $($that is for being in both the fashion and the magazine businesses$).$

If Buhoo currently has $6m$ shares at a is per share and $3m$$ debt. and plans to maintain the same debt to equity ratio for the foreseeable future, estimate the beta for Buhoo looking forward $($that is for being in the fortion and magazine businesses$).$

If Buhoo plans to maintain the same debt and equity, mentioned in part $7$ above, for the foreseeable future. What is the weight of equity capital?

Estimate the weighted average cost of capital for Buhoo