GoodFood Inc., a food processing company, has come to you for some help in estimating a beta for their equity. The firm has been publicly traded for two years and the regression beta is $0\mathrm{.}45.$ The firm is in two businesses, and you have collected the following information on them:

where EV $($Enterprise Value$)=$ Market Value of Equity $+$ Market Value of Debt $-$ Cash.

In addition, GoodFood has $100$ million shares outstanding, trading at $$9/$share and the market value of debt is $$100$ million. The riskfree rate is $3\mathrm{.}5\%,$ the equity risk premium is $4\mathrm{.}5\%$ and the firm has a rating of BBB $($with a default spread of $1\mathrm{.}5\%).$ The marginal tax rate for all firms is $40\%$Intro

GoodFood Inc., a food processing company, has come to you for some help in estimating a beta for their equity. The firm has been publicly traded for two years and the regression beta is $0\mathrm{.}45.$ The firm is in two businesses, and you have collected the following information on them:

$\backslash$table$[[,,$Comparable Firms,Comparable Firms$],[$Business$,\backslash$table$[[$Revenues $($in$],[$millions$)]],$Unlevered Beta,EV$/$Revenues Ratio$],[\backslash$table$[[$Food$],[$Processing$]],800,0\mathrm{.}6,0\mathrm{.}5],[$Restaurants$,200,1\mathrm{.}2,3]]$

where EV $($Enterprise Value$)=$ Market Value of Equity $+$ Market Value of Debt Cash.

In addition, GoodFood has $100$ million shares outstanding, trading at $$\frac{9}{?}$ share and the market value of debt is $$100$ million. The riskfree rate is $3\mathrm{.}5\%,$ the equity risk premium is $4\mathrm{.}5\%$ and the firm has a rating of BBB $($with a default spread of $1\mathrm{.}5\%.$ The marginal tax rate for all firms is $40\%$

$1.$ Estimate the company's WACC $($weighted average cost of capital$).$