show math calculations, not excel

8. Grace's's Glamping Inc. is a profitable firm that is now considering expanding beyond tent tourism into the beachside restaurant business. Grace's current debt to equity ratio is 0.4, and her current WACC is 14%. She remembers from Finance class that it may be unwise to use her current cost of capital for a project that is a different risk level than her existing business. So she has gathered the following information on two pure-play firms in the beachside restaurant business. All firms have a 32% corporate tax rate. Levered Beta D/E ratio Sands beachside caf Surfs beachside caf 1.75 2.25 0.7 1.25 a) What is the unlevered beta for each firm, Sands and Surfs? Sands Unlevered beta: Surfs Unlevered beta: b) Grace plans to retain her current debt-to-equity ratio if she expands into the beachside restaurant business. What beta value should she use to estimate a reasonable cost of capital for this project under the pure-play approach