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Answer both questions please! 1. We have the following information for Anheuser-Busch Companies, Inc Company Beta Market Market Bond Value Value Rating of of Debt
Answer both questions please!
1. We have the following information for Anheuser-Busch Companies, Inc Company Beta Market Market Bond Value Value Rating of of Debt Equity 40605 5375 Anheuser-0.5 Busch Assuming no tax is paid. Furthermore, we have the following economy-wide information Government Bond yields 10-year 4.5% Bond yield spreads (ie. bond yield -risk free rate) for A+ rating 10-year 1.00% Assume that the expected return on the S&P 500 is 10%. Estimate Anheuser-Busch's WACC using this information. 2. Identical Twin Beer, Co. has exactly the same business risk as Anheuser-Busch, but it has 100% of equity and no debt. According to the data in question 1. what is the beta of Identical Twin? What is its cost of capitalStep by Step Solution
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