"Amazon" is a holding company that has two main divisions: e-commerce and cloud computing. Amazon itself (at the top level) has $1 bil Notional Amount of 10yr debt outstanding, with a coupon of 3%, trading at a YTM of 3.60%. Amazon has 4 mil common equity shares outstanding; they are trading at a price of $250 per share and have a Beta of 1.75. Amazon's corporate tax rate is 33% E-Commerce is a low-risk yet capital intensive business with an effective tax rate of 30%. We estimate that as a stand- alone entity, E-Comm would have 75% of the debt and 75% of the equity of Amazon as a whole. We estimate that the Beta on E-Comm is 1.25 Cloud Computing is a high-risk yet minimal capital business with an effective tax rate of 35%. We estimate that as a stand-alone entity, Cloud would have 25% of the debt and 25% of the equity of Amazon as a whole. We estimate that the Beta on Cloud is 2.50 You assume the risk-free rate is 2.50% and that the expected equity market return will be 14.50% next year. Regarding the E-Commerce Division, what is the market value of debt capital? 25 26 Regarding the E-Commerce Division, what is the market value of equity capital? 27 Regarding the E-Commerce Division, what is the after-tax cost of debt capital? 28 Regarding the E-Commerce Division, what is the cost of common equity capital? 29 Regarding the E-Commerce Division, what is the WACC of this division? 5pts 30 Regarding the Cloud Computing Division, what is the market value of debt capital? 31 Regarding the Cloud Computing Division, what is the market value of equity capital? 32 Regarding the Cloud Computing Division, what is the after-tax cost of debt capital? 33 Regarding the Cloud Computing Division, what is the cost of common equity capital? 34 Regarding the Cloud Computing Division, what is the WACC of this division? 5pts