Weston Enterprises is an all$-$equity firm with two divisions. The soft drink division has an asset beta of $0\mathrm{.}68,$ expects to generate free cash flow of $$74$ million this year, and

anticipates a $4\%$ perpetual growth rate. The industrial chemicals division has an asset beta of $1\mathrm{.}07,$ expects to generate free cash flow of $$78$ million this year, and anticipates a

$3\%$ perpetual growth rate. Suppose the risk$-$free rate is $4\%$ and the market risk premium is $5\%.$

a$.$ Estimate the value of each division.

b$.$ Estimate Weston's current equity beta

c$.$ Estimate Weston's current cost of capital. Is this cost of capital useful for valuing Weston's projects? How is Weston's equity beta likely to change over time?

a$.$ Estimate the value of each division.

The cost of capital for the soft drink division is $7\mathrm{.}40\%.($Round to two decimal places.$)$

The value of the soft drink division is $$2,176\mathrm{.}5$ million. $($Round to one decimal place.$)$

The cost of capital for the industrial chemicals division is $9\mathrm{.}35\%.($Round to two decimal places.$)$

The value of the industrial chemicals division is $$1,228\mathrm{.}3$ million. $($Round to one decimal place.$)$

b$.$ Estimate Weston's current equity beta.

Weston's current equity beta is

$($Round to two decimal places.$)$