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Marcosoft Inc. is a publicly traded company that operates in thesoftware and entertainment business, deriving 60% of its value fromsoftware and 40% from entertainment. You have collected thefollowing information on comparable firms:Comparable companiesLeveraged betaD/E ratioSoftware industry1.400.25Entertainment1.250.5Macrosoft has 60 million shares outstanding, trading at$10/share and $180 million in 10-year corporate bonds (with acoupon rate of 4%) outstanding, trading at par. The company alsohas lease commitments of $40 million a year for the next 6 yearsand a marginal tax rate of 40%.Estimate the current debt to equity ratio (in market valueterms) for Macrosoft (make sure to capitalise the leasecommitments)Estimate the levered beta for the companyEstimate the current cost of equity for the company if riskfree rate (Rf) is 2% and the market risk premium (Rm – Rf) is5.8%Finally, compute the cost of capital for the company