a) You are interested in estimating a beta for Digital Universe Company. Since they are a privately held firm, you do not have access to the necessary data. If you want to estimate a beta for DUC, you will have to work with some comparable firm data. Calculate the unlevered betas for each of the four basic comparable firms shown below. (Hint: Be sure to adjust for the respective tax rates given.) Comparable Firms Tax Rate Judy in the Sky, Inc. Yellow Submarine, Ltd. Eleanor Rigby, Co. Hold My Hand, LLC Sales ($ Mill) 54.86 312.29 18.90 75.35 461.40 Levered Beta 1.45 1.33 1.12 1.23 Total Debt Ratio 22.0% 27.0% 32.0% 45.0% 25% 35% 30% 28% b) Estimate an equally-weighted and sales-weighted average unlevered betas using the data from your answer above. c) Digital has a target capital structure of 10% debt and 90% equity as well as a 40% marginal tax rate. If you estimated an unlevered beta of 1.30, calculate the levered beta for Digital. d) The current appropriate risk-free rate is 6% and the return on the market is 13.5%. Further assume that you calculated the levered beta above as 1.29. Using the CAPM, estimate DE's cost of equity. Be sure to state any additional assumptions