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PharmaCare is a company that offers health care services. The company has $ 2 4 0 million in interest - bearing debt. The firm has

PharmaCare is a company that offers health care services. The company has $240 million in interest-bearing debt. The firm has 22 million shares trading at $27 a share, and the unlevered beta of firms in the health care business is 1.15. The firm has a current rating of B, with a default spread of 0.05 over the risk free rate. The risk free rate is 0.045, the equity risk premium is 0.055 and the corporate tax rate is 40%.
The market value of equity in millions is
Estimate the debt to capital ratio for the firm.
Estimate the debt to equity ratio for the firm.
What is the levered beta for the firm?
Estimate the before tax cost of debt for the firm.
Estimate the after tax cost of debt for the firm.
Estimate the cost of equity for the firm.
Estimate the weighted average cost of
capital for the firm.
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