ACTL 11 Debt-to-equity (D/E) ratio Operating assets 1 Billion Equity beta 2 Debt beta 0 Pension plan Equity beta 11 Bond beta O Market value 800 Million Equity allocation 60% Surplus o The risk-free rate is 2.0% p.a., and the market risk premium is 10%. The current pension fund surplus is 0. HINT: Total Assets = Operating Assets + Pension Assets Total Liabilities + Equity = Debt + Equity + Pension Liabilities a. Calculate the cost of equity for ACTL. [2] b. Evaluate the weighted average cost of capital (WACC) for ACTL. [3] c. Calculate the beta of total assets including the pension plan. [4] d. Evaluate the WACC for ACTL including the pension plan. [4]