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You have run a regression of Google returns against returns on the S&P500 and the equation was as follows: ReturnsGoogle = 0.0003 + 0.75 (ReturnsS&P500)

You have run a regression of Google returns against returns on the S&P500 and the equation was as follows:

ReturnsGoogle = 0.0003 + 0.75 (ReturnsS&P500) R2 = 0.55, the standard error for the beta estimate is 0.5

You also note that the average unlevered beta for comparable firms is 1.2, Google's debt-to-equity ratio 30% ,T-bond rate is 0.075 and the equity risk premium is 0.065 and Google AA rate bond default spread is 0.01. ( Tax rate = 40%)

Please write your answers in decimals.

What is the levered beta for Google?

Answer for part 1 What is Google's after tax cost of debt?

Answer for part 2 What is Google's cost of equity?

Answer for part 3 What is the WACC?

Answer for part 4 What is the firm specific risk?

Answer for part 5 What is the market risk?

--------------- Please Solve As soon as Solve quickly I get you thumbs up directly Thank's Abdul-Rahim Taysir

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