QUESTION 1 MY Inc. is a private firm producing specialty chemicals. MY can borrow currently at 7% and has a constant leverage ratio (DV) of 25%. MY also has a beta of debt equal to 0. The CEO is trying to estimate WACC for M. The CEO has identified two comparables, i.e. firms with similar business. The first firm is PH Co. It trades for $6.25 per share and has 8,000,000 shares outstanding. It has an equity beta of 1.56 and a debt beta of 0. It also has debt of $15,000,000. The second comparable is WH Co. It trades for $5 per share and has 7,000,000 shares outstanding and debt with value of $21,000,000. The equity beta of WH is 2.08 and its debt beta is 0.15. Both comparables have constant leverage ratios. Last, the tax rate faced by all three firms is 35%, the risk-free rate is 5%, and the equity premium is 10%. QUESTION 1-A (10 PTS) Find the equity beta for MY Inc