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SHOW WORK PLEASE You are a manager for Humana Inc., and you are trying to determine the appropriate discount rate to use in valuations of

image text in transcribedSHOW WORK PLEASE

You are a manager for Humana Inc., and you are trying to determine the appropriate discount rate to use in valuations of average risk project proposals for the company. You have the following information: YTM on 10-year Treasury bill: 2.359% Beta on common stock: 0.58 Expected return on market portfolio: 8.5% Additionally. you collected the following information from Humana's most recent annual financial disclosure and market prices on current bond issues Total Book Value (in millions) Bond issue Coupon Rate Market Price Quote YTM (per bond) 7.200% 500 104 2.240% $500 million,720% due June 15 2018 $300 million, 6.30% due August 1. 2018 $400 million, 2.625% due October 1, 2019 $600 million, 315% due December 1, 2022 $600 million, 3.85% due October 1, 2024 $250 million, 8.15% due June 15, 2038 $400 million, 4.625% due December 1, 2042 $750 million, 4.95% due October 1, 2044 6.300% 300 2.420% 2.625% 400 98 3.700% 3150% 600 103.12 2.480% 3.850% 600 98 3.230% 8.150% 250 148.22 5.750% 4.625% 400 99.65 4.650% 4.950% 750 100 4.950% The market price for one share of common stock is $255.27, and there are 146.280 million shares outstanding. What is Humana's debt-to-equity (D/E) ratio? Enter your answer as a decimal, rounding to the nearest ten-thousandth. (For example, write "1.23%" as "O123")

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