Estimate the cost of internal equity-zycor corporation

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Zycor Corporation obtains most of its funding Internally. Assume that the stock has a beta of 1.2 the riskless rate is 6.5% and the market risk premium is 6%.

A. Estimate the cost of internal equity

B. Now assume that the cost of issuing new stock is 5% of the proceeds. Estimate the cost of eternal equity.

Reference no: EM132696499

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