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 all 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. Kiliminjaro has a stock price of $20 per share, with 15 million shares outstanding. It also has $120 million in outstanding debt, with a yield on the debt of 4.5%. Kiliminjaro's equity beta is 1.00. Assume Kiliminjaro's debt has a beta of zero. Estimate Kiliminjaro's unlevered beta. Use the unlevered beta and the CAPM to estimate Kiliminjaro's unlevered cost of capital. Estimate Kiliminjaro's equity cost of capital using the CAPM. Then assume its debt cost of capital equals its yield, and using these results, estimate minjaro's unlevered cost of capital. Explain the difference between your estimates in part (b) and part (c)