You have been asked to estimate the beta of a high-technology firm; which has three divisions with the following characteristics;

Divisions Beta Market Value

Personal Computer 1,6 100 $ Million

Software 2,0 150 $ Million

Computer Maintenance 1,2 250 $ Million

a) What is the beta of the equity of the firm ?

b) If the risk free return is 5% and the spread between the return on all stock is 5,5%,estimate the cost of equity for the software division?

c)What is the cost of equity for the entire firm ?

d)Free cash flow to equity investors in the current year(FCFE) for the entire firm is 7,4 $ Million and for the software division is 3,1 $ Million.If the total firm and the software division are expected to grow at the same 8% rate into foreseeable future,estimate the market value of the firm and of the software division.