Part 1 Assumptions: The CAPM holds, the risk-free rate is 5% and the expected market risk premium is 10% Markets are efficient XYZ is a mature company in a mature sector with zero expected growth and pays out all of its net income to its shareholders via dividends. XYZ has currently 200 shares outstanding XYZ's expected after tax unlevered NCF from its current enterprise is $600 per year and its enterprise beta is1 XYZ maintains a permanent excess cash balance that earns the risk free rate and has market value equal to $1,000 XYZ has outstanding debt obligations with market value of $1,000 and cost of borrowing equal to 5% - Assume XYZ is at its optimal capital structure on the "flat portion" of the WACC-Leverage relation. So, you may ignore taxes, bankruptcy cost, etc. for the purpose of cost of capital calculations. Questions: Given this information, what is your estimate of XYZ's... (i) stock price? () equity beta? (ii) expected return on equity? (iv) cost of capital