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Please use the provided excel to solve this problem and please shows work / formula on working cells.

The CFO of Sterling Chemical is interested in evaluating the cost of equity capital for his firm. However, Sterling uses very little debt in its capital structure (the firm's debt-to-equity capitalization ratio is only 20%), while larger chemical firms use substantially higher amount of debt. The following table shows the levered equity betas, debt-to-equity ratios, and debt betas for three of the largest chemical firms:

Company Name	Levered Equity Betas	Debt/Equity Capitalizatioin	Assumed Debt Betas
Easman Chemical Co. (EMN)	1.79	30.77%	0.30
Celanese Copr. (CE)	1.98	23.55%	0.30
Dow Chemical Company (DOW)	1.71	21.60%	0.30

a. Use the information given above to estimate the unlevered equity betas for each of the companies. (Please provide excel formulas, and round to 4 decimals)

b. If Sterling's debt-to-equity capitalization ratio is .20 and its debt beta is .30, what is your estimate of the firm's levered equity beta?

Please use the provided excel to solve this problem and please shows work / formula on working cells.

PROBLEM 4-7 Given Analysis of unlevered equity beta with risky debt beta = .30 Tax Rate 38% Company Name Eastman Chemical Co. (EMN) Celanese Corp. (CE) Dow Chemical Company (DOW) a. Solution Levered Equity Betas 1.7900 1.9800 1.7100 Debt/Equity Assumed Unlevered CapitalizationDebt Betas Equity Betas 30.77% 0.30 23.55% 0.30 21.60% 0.30 Average Average b. Solution Analysis of Sterling Analysis based on simple average of unlevered equity betas beta unlevered D/E 20.00% beta levered beta debt 0.30 D/E 0.2

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