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pls help me (b) Mammoth Industrial is a conglomerate with an optimal capital structure that consists of 40% debt and 60% common equity. Mammoth's marginal

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(b) Mammoth Industrial is a conglomerate with an optimal capital structure that consists of 40% debt and 60% common equity. Mammoth's marginal tax rate is 40% and it operates the following subsidiaries/divisions: If the risk-free rate is currently 5 percent and the expected return on the market is 12\%: (i) Compute the firm's cost of equity capital. (hint: you need to calculate the firm's overall beta first, and then use the CAPM) [2 marks] (ii) If the Airline division can borrow at 12% pre-tax cost, compute the Airline division's cost of capital. [3 marks] (iii) If the firm decides to increase the size of its Consumer Finance division relative to the other divisions. explain the impact on Mammoth's optimal capital structure and its systematic risk. [4 marks]

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