Q3. Amounts BESTWAY Pak Ltd BALANCE SHEET As on 30th June, 2020 ASSETS Amounts LIABILITIES Cash and short-term securities 1,000,000 Bonds Accounts Receivables 3,000,000 Preferred stocks Inventories 7,000,000 Common Stocks Property Plant and Additional paid in Equipment 21,000,000 capital Retained Earnings 32,000,000 Total Note: The Corporation does not have any short-term liability. Additional Information: 10,000,000 2,000,000 100,000 9,900,000 10,000,000 32,000,000 Page 2 of 3 1) The bonds of the corporation have a face value of Rs.1,000 per bond and have 10 years to maturity. The coupon rate on these bonds is 7% paid annually. Current market price is Rs 1135. 2) The corporation has one million common shares outstanding 3) Preferred stocks of the corporation have a par value of Rs.20 per share, and its common stocks have a par value of Rs.0.10 per share. 4) The preferred stock currently sells for Rs.20 per share and common stock forRs.25 per share. 5) Preferred stocks of the company pay a dividend of Rs.2.00 per share. The common stocks have a beta of 1.50. The market risk premium is 10%, the risk free rate is 6% and the firm's tax rate is 30%. Required: a) Calculate market value WACC. b) Discuss unlevered beta. 2