x=4 put 4 where you see x.

3. Please answer the followings for the pharmaceutical company according to the information below. (25 pts) Department Beta Market Value R&D 2.x $x00 million Clinical Research 1.x $3x0 million Operations 0.x $4x0 million a. What is the beta of the equity for the firm? (6 pts) b. If the risk free rate is x% and the spread between the return on all stocks (market risk premium) is x.5%, estimate the cost of equity for the R&D department? (6 pts) c. What is the cost of equity for the entire firm? (6 pts) d. Free cash flow to equity investors in the current year (FCFE) for the entire firm is $5.x million and for the R&D department, it is $2.x million. If the total firm and the R&D department are expected to grow at the same x% rate into the foreseeable future, estimate the market value of the firm and of the R&D department. (7 pts)