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(Lecture 10 - Asset Cost of Capital and Leclure 11- Capital thadgoting and Vakation with Leverage) ABC Corp. is an e-commerce company. Its management is

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(Lecture 10 - Asset Cost of Capital and Leclure 11- Capital thadgoting and Vakation with Leverage) ABC Corp. is an e-commerce company. Its management is planning to stait its own package delivery business (new to the firm) to be financed with only equity SF logistics and XYZ Enterprise are two firms that spocializes in this package deltrery buainess. Yous are given the following financials for these firms - ABC Corp. cumrently has a stock price of 518 per share with 25 million shares outstanding Its market value of dabt is 5300 million. The company has a Gebt beta of 0,1 , an equity beta of 1,63 , and it faces a tax rate of 21% - XYZ Enterpise is an all-equity financed firm with market capitalization of 52.50 million. The company has an equity beta of 1.6 and faces a tax ate of 21% - SF logintics has a stock price of $15 per share with 20 millon shares outstanding. lta anarket valse of debt as 5300 maillon. The flim has a debr beta of 0.2 , an equity beta of 1.8 , and it faces a tax rate of 21%. Assume that the risk-free rate is 1% and the expected market if o premlum is 5%. If the management of ABC asks for an estinate of cost of capital with a Hmall estimation error, then your estimate of the cost of capital for fhe ABC's package dolivery businest is _ \% Note that If you have soveral appropriato estimates, then just take the simple average of these estimates as your final cost of capltal lo minimize the estimation entor. decimal places E.9. If your answer is 10136%, then input 10.14. \%. May 6. 2023 90004d1 PM CDT

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