The ordinary shares have a face value of 25p and currently trade at 135p cum div. The debentures are trading at 897.78 per E100. Mac 1 Cheese Pic's equity beta is 1.613. The first venture's net after tax cash inflows are expected to be 53.25m each year for the fiveyear life of the project. It is estimated that the second 'new' venture will give rise to net after tax cash inflows of E3m in each year over its five-year life. The following information on companies already working in this industry has been obtained: Face value of shares of Gamma Ple is 50p and of Delta Plc shares is 25p Continued on the next page... [I] The 'new' second venture will be financed as. follows: E2 m12% Bank Loan E3m 9\% Local Government Loan (subsidised) E5m Rights Issue Issue costs of 3% of the net proceeds will arise from the rights issue and are not tax deductible. Corporation tax is currently 20% and can be assumed to be paid in the same year as it's due. The current risk-free rate is estimated at 5% and the market risk premium is estimated as 4.65%. The ordinary shares have a face value of 25p and currently trade at 135p cum div. The debentures are trading at 897.78 per E100. Mac 1 Cheese Pic's equity beta is 1.613. The first venture's net after tax cash inflows are expected to be 53.25m each year for the fiveyear life of the project. It is estimated that the second 'new' venture will give rise to net after tax cash inflows of E3m in each year over its five-year life. The following information on companies already working in this industry has been obtained: Face value of shares of Gamma Ple is 50p and of Delta Plc shares is 25p Continued on the next page... [I] The 'new' second venture will be financed as. follows: E2 m12% Bank Loan E3m 9\% Local Government Loan (subsidised) E5m Rights Issue Issue costs of 3% of the net proceeds will arise from the rights issue and are not tax deductible. Corporation tax is currently 20% and can be assumed to be paid in the same year as it's due. The current risk-free rate is estimated at 5% and the market risk premium is estimated as 4.65%