CARBS is a food company specialising in sport supplements, which has a current arket value of equity of 3.0 billion and a beta of 1.60. CARBS recently announced at it plans to acquire Discount Supplements (DS), which has a current market value equity of 2.0 billion and a beta of 1.10 . Neither company has any debt in its financial ructure at the time of the acquisition and the corporate tax rate is 30%. i. Estimate the beta for CARBS after the acquisition, assuming that the acquisition was financed only with equity. ii. Estimate the beta for CARBS after the acquisition, assuming that CARBS had to borrow 2.0 billion in order to acquire Discount Supplements. Globe stock has a beta of 1.05 . The Treasury bill rate is 5.50% per annum (p.a.) and Treasury bond rate is 6.50% p.a. Globe has debt outstanding of 1.90 billion and rarket value of equity of 1.50 billion. Further, the market risk premium for stocks ver Treasury bills is 7.50% p.a. and the risk premium for stocks over Treasury bonds 4.50% p.a. The current corporate tax rate is 30%. i. What is the expected return on Globe's stock for a short-term investor? ii. What is the expected return on Globe's stock for a long-term investor? iii. Which of your answers in (i) and (ii) above you think more appropriately represents the cost of equity for Globe and why? iv. Estimate the unlevered beta for the company. v. How much of the risk in the company can be attributed to business risk and how much to financial leverage risk