Multiple Choice
Your firm is planning to invest in a new power generation system.Galt Industries is an all-equity firm that specializes in this business.Suppose Galt's equity beta is 0.75,the risk-free rate is 3%,and the market risk premium is 6%.If your firm's project is all-equity financed,then your estimate of your cost of capital is closest to:
A) 5.25%.
B) 6.00%.
C) 6.75%.
D) 7.50%.
Correct Answer:
Verified
Correct Answer:
Verified
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