P12-40. Estimating Market and Book Values and Cost of Capital Measures The December 31, 2018, partial balance sheet of 3M Company follows (amounts in millions, except share and per share amounts). YCharts.com reported that the total market capitalization of 3M was $108.46 billion and its stock price was $190.54 as of December 31, 2018. Also, YCharts.com estimates its total enterprise value at $119.84 billion, and its market beta at 1.14. 3M's average pretax borrowing cost is 2.07%, and its assumed statutory tax rate is 21%. Assume that the risk-free rate equals 2.1% and the market premium equals 5%. $ 1,211 2,266 749 243 2,775 7,244 13,411 2,987 3,010 26,652 Liabilities Current liabilities Short-term borrowings and current portion of long-term debt... Accounts payable Accrued payroll... Accrued income taxes. Other current liabilities Total current liabilities Long-term debt... Pension and postretirement benefits Other liabilities ... Total liabilities Equity 3M Company shareholders' equity Common stock par value, $0.01 par value. Shares outstanding - 2018: 576,575,168 Shares outstanding - 2017: 594,884,237 Additional paid-in capital.. Retained earnings.. Treasury stock Accumulated other comprehensive income (loss) Total 3M Company shareholders' equity... Noncontrolling interest ... Total equity.... Total liabilities and equity 9 5,643 40,636 (29,626) (6,866) 9,796 52 9,848 $36,500 Required a. Verify YCharts.com's computation of 3M's market capitalization using the data from its financial report excerpts above. b. Compute the book value of 3M's long-term debt as of December 31, 2018. c. Compute the market value of 3M's debt using the data from YCharts.com. d. Identify at least two reasons behind the difference between the amounts computed in parts b and c. e. Compute 3M's cost of debt capital. f. Compute 3M's cost of equity capital. g. Compute 3M's weighted average cost of capital. Use the market capitalization from YCharts.com for this calculation