Marcosoft Inc. is a publicly traded company that operates in the software and entertainment business, deriving 60 % of its value from software and 40 % from entertainment. You have collected the following information on comparable firms: Comparable companies Leveraged beta D/E ratio Software industry 1.40 0.25 Entertainment 1.25 0.5 Macrosoft has 60 million shares outstanding, trading at $10/share and $180 million in 10-year corporate bonds (with a coupon rate of 4% ) outstanding, trading at par. The company also has lease commitments of $40 million a year for the next 6 years and a marginal tax rate of 40 % Estimate the current debt to equity ratio (in market value terms) for Macrosoft (make sure to . capitalise the lease commitments) Estimate the levered beta for the company b. Estimate the current cost of equity for the company if risk free rate (Rf) is 2% and the market risk . premium (Rm -Rf) is 5.8% d. Finally, compute the cost of capital for the company