PLEASE SHOW WORK IN EXCEL

6. Wolverines has decided to acquire Buckeyes corporation. Because Wolverines is larger, after the acquisition, the combined company will use Wolverines cost of debt and Wolverines Debt and Equity percentages. You need to find an appropriate discount rate with which to discount Buckeyes' future cash flows. What weighted average cost of capital should be used to evaluate Buckeyes? Your supervisor has given you the unlevered (asset) beta of 0.85 to use, and has told you to calculate the levered (equity) beta using Wolverines D/E note that the equity beta is the levered beta; the unlevered beta is known as the asset beta) Wolverines' corporate earnings are taxed at 25% Wolverines has $50 million in interest-bearing debt. The bonds are selling at par. The stated interest rate on Wolverines' debt is 8.00% (eight percent) Wolverines' stock is trading at $80 per share. There are 1 million shares of Wolverines' stock outstanding. The risk-free rate is 3% and the market risk premium is 6%. NOTE that to answer this question you will need to use the Hamada equation; you need to calculate a cost of equity, and then use that cost of equity in the weighted average cost of capital equation. a. What is the cost of equity that Wolverines will use for this acquisition? b. What is the weighted average cost of capital that will be used to evaluate Buckeyes