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b) Red Shoe Investment's dient, Swiss Manufacture Limit, needed the professional assessment of a firm which they wanted to acquire. Your manager assigned you to

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b) Red Shoe Investment's dient, Swiss Manufacture Limit, needed the professional assessment of a firm which they wanted to acquire. Your manager assigned you to the client. Using the information below provide answers to the following: . Details Risk free rate Expected return on the market Levered beta Long term debt Total Equity Marginal tax rate Amount 3% 12% 1.5 25,000 40,000 30% i. Calculate the market risk premium. (2 Marks) ii. Using the CAPM, calculate the required return on equity. (3 Marks) Calculate the unlevened beta (4 Marks) iv. Why are the values of market risk premium, CAPM and unlevered beta important when making investment decisions

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