9. Dreyer's Grand Ice Cream Holdings, Inc. is a publicly-held US company that has two primary businesses, ice cream manufacturing and ice cream distribution. Dreyer's assets have a total market value of 180 million of which 70% are manufacturing and 30% are distribution assets. The beta for the manufacturing assets is 0.47 and Dreyer's equity beta is 0.75. Dreyer's only liability is 20 million of long-term debt with a beta of 0.3. The risk-free rate is 5%. The current share price is 22.86 and there are 7 million shares outstanding. a. What is Dreyer's overall asset beta? b. Dreyer's is considering selling the distribution assets and investing the money in short- term government bonds. If Dreyer's does this, would the firm equity beta be higher, lower or the same? Explain. Redden Microbatch Ice Cream, Inc., a privately held firm, markets and sells super- premium ice cream. Unlike Dreyer's, Redden's Microbatch does not manufacture their own ice cream (the company has only distribution assets). Redden's Microbatch will launch an IPO this week. Suppose you are trying to value Redden's Microbatch using information on Dreyer's. What discount rate should be used to value the total free cash flow of the firm? Assume that the market risk premium is 8.4%