BigCo has a market value of $1 billion and a beta of .9. It has three divisions: chemical processing, oil and gas distribution, and plastic products. The company is thinking about buying another chemical producer, ChemCo. ChemCo is expected to earn cash flows of $9 million this year and cash flows are expected to grow 4% per year thereafter. The beta of ChemCo is 1.4. Currently, the risk-free rate is 4% and the expected rate of return on the market portfolio is 11%.

a.	What is the expected rate of return for BigCo? (Round your answer to 1 decimal place.)
	Expected rate of return %
b.	What discount rate should BigCo use to evaluate ChemCo? (Round your answer to 1 decimal place.)
	Discount rate %
c.	How much is ChemCo worth? (Round your answer to 3 decimal places. Enter your answer in millions of dollars.)
	Value of ChemCo $ million
d.	Suppose BigCo acquires ChemCo for the price in (c). What will be BigCo's new beta after adding ChemCo? (Round your answer to 3 decimal places.)
	New beta