Ferrari, the famous high-performance automotive group, launched its initial p Although the share price had initially risen to over 57 per share, by the end of the year it had settled to 48. Ferrari had ing (IPO) on October 20, 2015 been owned by Fiat (Italy), and had never calculated its own cost of capital before, one independent of Fiat It now needed to, and one of its first challenges was estimating its beta. With only two months of corporate treasury group had started with what were considered'comparable firms, which for Fem luxury goods industry, not automotive. Luxury goods were historically less volatile than the market, so the initial guess on Ferrani's beta was 0.90. Using the following assumptions, answer the questions. Assumptions Italian risk-free cost of debt in euros () Ferrari's cost of debt in euros () Italian corporate income tax rate Ferrari's prospective beta Italian equity market risk premium (equity return over risk-free) Ferrari's shares outstanding Ferrari's share price in euros Ferrari's debt outstanding in euros trading to base it on, the Ferrari, meant firms in the Values 4.00% 3.99% 33.50% 0.90 5.5096 189,000,000 48.00 510,000,000 a. What is Ferrari's cost of debt, after-tax, in euros? b. What is Ferrari's cost of equity in euros? c. What proportion of Ferrari's capital structure is debt? d. What proportion of Ferrari's, capital structure is equity? e. What is Ferrari's weighted average cost of capital