not use ai please You are trying to calculate the WACC for two firms. Firm XiG is publicly traded and firm TanW is a private firm. You have collected allnecessary information for your WACC calculation:In terms of liabilities, XiG has account payables of $400Million and a bank loan of $200Million. XiG also has cash holding of $300 Million.XiG is current trading at $520/share with 1 Million shares outstanding. XiG's returns move one to one with the stock market returns.XiG's average tax rate is 30% and marginal tax rate of 35 %. XiG is rated as Aa1 by Moody's and similar Aa1 rating firms have cost ofdebt of 2%. Risk free rate is 1%, market risk premium is 5%.TanW is in the same industry as XiG. After consulting with an industry expert, you are confident that TanW and XiG have roughly thesame business risk. Currently, TanW has net debt to equity ratio of 2. TanW's average tax rate is 30% and marginal tax rate of 35 %. Itscost of debt is 3%.Now you proceed to calculate the WACC for both firms. 1)What is WACC for XiG?Enter the WACC for XiG:% (keep two decimal points)0.0/1.0 point (graded)Select the best answer from the following:1.011.241.511.602) What is the asset beta for TanW?

### 2. Calculate Asset Beta for Firm Tanw Since Tanw has the same business risk as XiG, we can use…

Answered: You are trying to calculate the WACC…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 8P

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