Sunshine Inc., a large catering service provider, is evaluating the possible acquisition of Tasty Food Corp. (TFC), a regional catering service provider. Sunshine's analysts project the following post-merger data for TFC (in thousands of dollars): 2024 2025 2026 2027 2028 Net sales $500 $600 $700 $760 $806 Selling and administrative expense $60 $70 $60 $90 $96 The acquisition will occur in early 2024 if the acquisition will be made. TFC currently has a capital structure of 30 percent debt, which costs 9 percent, but Sunshine Inc. would increase that to 40 percent debt, costing 10 percent if the acquisition were made. TFC, if independent, would pay taxes at 25 percent, and its income would be taxed at 25 percent if it were consolidated. TFC's current market-determined beta is 1.40. The cost of goods sold is expected to be 65 percent of sales. Gross investment in operating assets is expected to be equal to depreciation--replacing worn out equipment, so net investment in operating assets will be zero. The risk-free rate is 7 percent, and the market risk premium is 6.5 percent. Tax rate of ACC before the merger 25% Tax rate after merger 25% Cost of goods sold as a % of sales 65% Debt ratio (percent financed with debt) before the merger 30% Cost of debt before merger 9% Debt ratio (percent financed with debt) after the merger 40% Cost of debt after merger 10% Beta of TFC 1.40 Risk-free rate 7% Market risk premium 6.5% Terminal growth rate of free cash flow 6.0% 1.What is the unlevered beta for TFC pre-merger? 2.What is the levered beta for TFC post-merger? 3.What is the WACC for TFC post-merger? 4.Construct Free cash flow of TCF post-merger and calculate the present value of TCF after the merger