A Your firm is planning to invest in an automated packaging plant Xanadu Industries is an all-equity firm that specializes in this business. Suppose Xanadu's equity beta is 0.85, the risk-free rate is 4% and the market risk premium is 5%. If your firm's project is al equity financed. estimate its cost of capital B. Next, You find a firm, Kiliminjaro Design, which is also engaged in a similar line of business. This is a better comparable firm, Kilimanjaro has a stock price of $20 per share with 15 million shares outstanding It also has 5120 million in outstanding debt, with a yield on the debt of 45%. Kiliminaro's equity beta is 1.00. Assume Kiliminaro's debt has a beta of zero. Estimate Kiliminjaro's unlevered beta. Use the unlevered beta and the CAPM to estimate Kolimanjaro's unlevered cost of capital Estimate Kilminjaro's equity cost of capital using the CAPM. Then assume its debt cost of capital equals its yield, and using these results, estimate Kiliminaro's unlevered cost of capital. Explain the difference between your estimates in part (b) and part to the theores IT FPT ENIM