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1 Use the following information to answer the next three questions: Rearden Steel has $18 billion in debt, an equity capitalization of $95 billion, and

1 Use the following information to answer the next three questions: Rearden Steel has $18 billion in debt, an equity capitalization of $95 billion, and an equity beta of 1.24 as reported by Yoohoo Finance. Included in Rearden's assets are $22 billion in cash and marketable securities. Assume the current risk-free rate of interest is 3%, the current market risk premium is 7%, and that there are no corporate taxes. Question: Rearden's Enterprise Value is closest to? 113 135 99 109 91 Question 2 The beta of Rearden's business assets (unlevered beta) is closest to? 0.25 1.24 1.29 1.19 0.87 Question 3 Rearden's weighted average cost of capital (WACC) is closest to? 12.06% 8.18% 11.68% 7.96% 9.06%

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