What is the cost of capital for an otherwise identical

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Acetate SA has equity with a market value of €24 million and debt with a market value of €13.68 million. Treasury bills that mature in one year yield 8 per cent per year, and the expected return on the market portfolio over the next year is 20 per cent. The beta of Acetate's equity is 0.87. The firm pays no taxes.

Requirement

What is the cost of capital for an otherwise identical all-equity firm? (Do not include the percent sign (%). Round your answer to 2 decimal places (e.g., 32.16).)

 

Reference no: EM13304547

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