Required: (a) Explain precisely what is meant by the term 'same business risk class'. Estimate the beta value of Chardon- nay's equity. (b) Estimate the WACC of each company and comment briefly on the significance of your figures in respect of the M and M (no-tax) capital structure hypothesis. (c) Jean Davide is a small shareholder in Chardonnay. He has just received his regular dividend of 1 500. Jean has now been offered 10 000 for his shareholding. However, he does not know whether or not to sell his shares as he relies heavily on his annual dividend from the company. (d) Explain how Jean Davide can make himself better off, with no change in risk, by selling his shares in Char- donnay and investing in Cabernet. What would be his resulting gain? (e) Assuming Cabernet's debt and equity capital are at their equilibrium value, estimate the equilibrium value of Jean's shareholding in Chardonnay. Required: (a) Explain precisely what is meant by the term 'same business risk class'. Estimate the beta value of Chardon- nay's equity. (b) Estimate the WACC of each company and comment briefly on the significance of your figures in respect of the M and M (no-tax) capital structure hypothesis. (c) Jean Davide is a small shareholder in Chardonnay. He has just received his regular dividend of 1 500. Jean has now been offered 10 000 for his shareholding. However, he does not know whether or not to sell his shares as he relies heavily on his annual dividend from the company. (d) Explain how Jean Davide can make himself better off, with no change in risk, by selling his shares in Char- donnay and investing in Cabernet. What would be his resulting gain? (e) Assuming Cabernet's debt and equity capital are at their equilibrium value, estimate the equilibrium value of Jean's shareholding in Chardonnay