Beta, Financial Leverage, Weighted After-Tax Cost of Capital Assume that Sailing into the Sunset Monument Co., a conglomerate, wishes to consider establishing a grave headstone division. Those companies within the grave headstone industry in which the proposed division will be part, reflect an average equity 'beta' of 1.25, as well as a median debt beta of 0.3. In addition, the industry's Market Value based Debt/Asset ratio is 0.50:1. The conglomerate is anticipating a more conservative Market Value based Debt/Asset ratio for their new grave headstone division of 0.40:1. It is anticipated that the conglomerate's debt beta after recapitalization would be 0.2. With a prevailing risk-free rate of 6%, an historic excess market return of 8.0%, and a combined Federal and State marginal tax bracket of 30%, calculate the weighted after-tax cost of capital for the new division, given Kd = 7%. = Required: Calculate WACC based on Debt Betas (please show step by step) Beta, Financial Leverage, Weighted After-Tax Cost of Capital Assume that Sailing into the Sunset Monument Co., a conglomerate, wishes to consider establishing a grave headstone division. Those companies within the grave headstone industry in which the proposed division will be part, reflect an average equity 'beta' of 1.25, as well as a median debt beta of 0.3. In addition, the industry's Market Value based Debt/Asset ratio is 0.50:1. The conglomerate is anticipating a more conservative Market Value based Debt/Asset ratio for their new grave headstone division of 0.40:1. It is anticipated that the conglomerate's debt beta after recapitalization would be 0.2. With a prevailing risk-free rate of 6%, an historic excess market return of 8.0%, and a combined Federal and State marginal tax bracket of 30%, calculate the weighted after-tax cost of capital for the new division, given Kd = 7%. = Required: Calculate WACC based on Debt Betas (please show step by step)