Please do part a) please show the steps required to get to these answers for part a

Question 1 On 3 September 2008, Coca-Cola Company offered to buy China's largest fruit juice company, China Huiyuan Juice Group Limited. In early January 2009, the chief financial officer (CFO) of Huiyuan, Mr. Francis Ng, was evaluating his company and preparing for the negotiation with Coca-Cola for a possible deal. Huiyuan had been listed on Hong Kong Stock Exchange since February 2007. At the fiscal year end on 31 December 2008, Huiyuan had 4,267 million shares outstanding and was trading at HK$4.20 per share on Hong Kong Stock Exchange. Fruit juice companies in China similar to Huiyuan typically had an equity beta of 2.1 and debt-to-equity ratio of 1.5. (a) Huiyuan had a target debt-to-equity ratio of 0.6. The yield on Huiyuan's long-term debt had stabilized for years at 8.7%. The corporate tax rate was 25%. Table 1.1 provides information on Hong Kong capital market. Determine the cost of capital for Huiyuan. (7 points) Table 1.1 Hong Kong Capital Market Information A. HK Government Bond (Hong Kong Exchange Fund) Rates Current rate (December 2008) Historical average Jan 1965-Dec 2008 30-year bond 6.13% 30-year bond 8.16% 10-year bond 4.37% 10-year bond 6.88% 1-year bond 2.13% 1-year bond 4.08% B. Hang Seng Index Retums Most recent (annualized) return Average market risk premium Final week, 2008 6.43% 2003-2008 3.18% December 2008 4.69% 1997-2008 1.27% Whole year, 2008 2.13% 1965-2008 7.80% Question 1 (a) With D/E=1.5 changing to 0.6, the re-levered beta is 1.4329 Rf=6.13%, MRP=7.8% ke-17.31% With kp=8.7%, then WACC=13.26% (b) 2 OCF. Capital expenditure NWC investment Free cash flow 5,427 10,423 851 -5.847 12,101 10,461 823 817 3 12,434 6,626 578 5,230 Terminal value: 74,200 Enterprise value (which is the stand-alone value): 50,139 Value of debt: 27,426 Value of equity per share: 5.32 Value of forecast period CFs: -927 Present value estimates: 10.80 (from growing firms); 7.02 (from mature firms) Terminal-value approach: 12.19 (from growing firms); 8.05 (from mature firms) Synergy value of cost savings (at 11.5%): 21,818 (negative) Synergy effect of restructuring cost (at 9.5%): -5,793 Equity value from DCF (given): 35,000 Equity value with synergies: 51,025 or 11.96 per share