$1.$ What are the recommended WACCs for EPC$$s consumer products, medical devices, and pharmaceuticals divisions, respectively?

$$ Remember the pure$-$play method to calculate each division$$s beta e$.$

o Unlever comparable company$$s beta e to get beta u of each company.

o Then, use the average beta u of the comparables to relever to represent the target leverage ratio in market value terms.

$$ Pay attention to differences in leverage and investment horizon among the divisions.

$2.$ Explain what would occur if EPC were to use a single corporate$-$wide WACC for evaluating investment opportunities in each of its lines of business. What would be the likely consequence for the company over time if this were to occur?

$3.$ What would be the best estimate of EPC$$s corporate$-$wide WACC?

$$ EPC$$s corporate$-$wide beta is $1\mathrm{.}04.$ This beta is based on EPC$$s historical market leverage ratio. You will need to use the same unlever$-$relever process to find the correct beta e for EPC.

$$ Once you have beta e$,$ you$$ll have to make choices regarding other parameters in calculating WACC. You just need to state your choice and the rationale$/$reason to justify the decision.

Preferably, show calculations in Excel.