Buhoo is an Egyptian company. The outcome of a regression of Buhoo monthly stock returns against market monthly returns is as follows:

$=$

Returns Buhoo $=-1\mathrm{.}4\%+0\mathrm{.}9$ Returns S&P $500$

$1.$ What is the beta estimate for Buhoo?

$2.$ Is Buhoo's stock riskier than the market?

If Buhoo is riskier than the market, type $1$ in the answer box.

If Buhoo is less risky than the market, type $2$ in the answer box.

If you need more information to answer this question, type $3$ in the answer box.

$3.$ If the average risk$-$free rate during the regression period was $5\%,$ estimate Jensen's alpha for Buhoo, in annualized terms.

$4.$ During the period of the regression, Buhoo was in the Fashion business ONLY and had an average debt$-$to$-$equity ratio of $50\%.$ What is the business risk for the fashion business assuming a tax rate of $40\%?$

$5.$ Buhoo is considering investing in the magazine business. The average beta of firms specializing in the magazine business is $1\mathrm{.}3,$ and these firms have an average debt$-$to$-$ equity ratio of $30\%$; they face an average tax rate of $35\%.$ Estimate the business risk $($unlevered beta$)$ for the magazine business.

$6.$ Buhoo expects that half of its future revenues and earnings will come from the magazine business. Estimate the unlevered beta for Buhoo looking forward $($that is for being in both the fashion and the magazine businesses$).$

$7.$ If Buhoo currently has $8$m shares at a $1$$ per share and $3$m$ debt, and plans to maintain the same debt to equity ratio for the foreseeable future, estimate the beta for Buhoo looking forward $($that is for being in the fashion and magazine businesses$).$

Use this table for sections $8,9$ and $10$ below.

$10-$year Government Bond rate in USD $10-$year Government Bond rate in local currency $($Equity$)/($Government Bond$)$

Egypt $4\%($USD$)6\mathrm{.}5\%($EGP$)1\mathrm{.}4$

USA $2\%($USD$)2\%($USD$)$

$8.$ Estimate the Egyptian country's default spread.

$9.$ If the US equity risk premium is $5\%,$ estimate the equity market risk premium for Egypt.

$10.$ Calculate the risk$-$free rate in Egyptian Pounds.

$11.$ Estimate the cost of equity for Buhoo in Egyptian Pound.

$12.$ If Buhoo has a bond that is traded with a yield to maturity of $8\%.$ What is the after$-$tax cost of debt? Assume a $40\%$ as the marginal corporate tax rate.

$13.$ If Buhoo plans to maintain the same debt and equity, mentioned in part $7$ above, for the foreseeable future. What is the weight of equity capital?

$14.$ Estimate the weighted average cost of capital for Buhoo