MadBooks Corp is currently an all-equity firm with two divisions, one in publishing and the other in the operations of bookstores. The firm has a market value of equity of $840 billion, with a cash balance of $200 billion. The publishing business has a market value that is three times that of the bookstore operation business. The pure play unlevered beta for the publishing business is 1.4 while the bookstore operation business has a pure play unlevered beta of 1.1. The tax rate is 40%. a) Estimate the beta of MadBooks' equity. (4 marks) b) Assume that MadBooks is planning to borrow $60 billion to augment its cash balance and also do the following: Invest $70 billion in a new online gaming business. The online gaming business has a pure play unlevered beta of 0.8. Pay a special dividend of $150 billion. Estimate the beta of MadBooks' equity after the transactions. (6 marks) (TOTAL: 10 marks)