You have recently been hired by MasterTools $($MT$)$ in its relatively new treasury management department. MT was founded eight years ago by Martha Masters. Martha found a method to streamline the manufacturing process, resulting in a cheapertool. The tools manufactured by MT are designed for the mass market and sold primarily through retail. The company is privately owned by Martha and her family, and it had sales of $$97$ million last year.MT primarily sells to do$-$it$-$yourself $($DIY$)$ customers who use the tools for personal projects, although it does sell through various onlinemarketplaces. As a result, the company's sales are price sensitive$.$ When the company had sufficient capital, it would expand production. Relatively little formal analysis has been used in its capital budgetingprocess. Martha has just read about capital budgetingtechniques and has come to you for help. For starters, the company has never attemptedto determine its cost of capital, and Martha would like you to performthe analysis. Because the company is privately owned, it is difficult to determine the cost of equity for the company. Martha wants you to use the pure play approach to estimate the cost of capitalfor MT$,$ and she has chosen XYZ Incorporated as a representative company. The following questionswill lead you through the steps to calculate this estimate