Mantone Pty Ltd (ASX Listed Firm) provides IT services to the customers. Table below shows an extract of its balance sheet as at 30 June 2020:

Mantone Balance Sheet as at 30 June 2021 (Extract)
	Book Value $M	Market Value $M
Short Term Notes (14% interest)	3,000	3,000
Long Term Notes (11% interest)	5,000	15,000
Share Capital	2,000	7,000

1. Calculate cost of equity using CAPM if beta firm is 1.25, risk free rate 3%, and market risk premium is 8%. Round to two decimals.
2. How much is WACC with 30% tax rate? Round to two decimals. Beta debt is 0.32.(2 marks for the cost of debt, 2 marks for WACC, and 1 mark for the correct calculation)
3. Explain, using your own words, the effect of the debt value of a listed company on its total enterprise value.