26. You have run a regression of monthly returns on PepsiCo against returns on the S&P 500 over the last 5 years and arrived at the following result:- Returnerice = 0.23% + 1.20 * Returnarsoofi You are given the following additional information: . . The current market value of equity at Pepsi is $40 billion and the firm has $10 billion in debt outstanding.' During the last 5 years, Pepsi had an average market value debt to equity ratio of 10%. The firm's marginal tax rate is 40%. . You need to show all your workings along with the final answers. - 26 (a). Estimate Pepsi's current beta. 26 (b). Now assume that Pepsi will be spinning off its bottling operations for $10 billion, borrowing an additional $2 billion and buying back $12 billion worth of stock. The unlevered beta of firms operating in the bottling sector is on average 1.35. Estimate Pepsi's new beta