Calculate Ideko's unlevered cost of capital when Ideko's unlevered beta is 1.24, the risk-free rate of return is 4.78 percent and the expected market risk premium is 6.12 percent. As a reference, the equity betas with confidence intervals along with capital structure and unlevered beta estimates for comparable firms are shown here,

Equity Betas Confidence Intervals for Comparable Firms

Capital Structure Unlevered Beta Estimates for Comparable Firms

The estimate of Ideko's unlevered cost of capital is ______%.

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Monthly Returns Firm Beta Oakley 1.99 Luxottica 0.56 Nike 0.48 10-Day Returns Beta 1.37 0.86 0.69 95% C.I. 1.20 to 2.80 0.00 to 1.10 -0.10 to 1.00 95% C.I. 0.90 to 1.90 0.50 to 1.20 0.40 to 1.00 E E+D Firm Oakley 1.00 Luxottica 0.83 Nike 1.05 D E+D BE BD BU 0.00 1.50 0.17 0.75 -0.05 0.60 0.00 0.00 1.50 0.00 0.62 0.63 Monthly Returns Firm Beta Oakley 1.99 Luxottica 0.56 Nike 0.48 10-Day Returns Beta 1.37 0.86 0.69 95% C.I. 1.20 to 2.80 0.00 to 1.10 -0.10 to 1.00 95% C.I. 0.90 to 1.90 0.50 to 1.20 0.40 to 1.00 E E+D Firm Oakley 1.00 Luxottica 0.83 Nike 1.05 D E+D BE BD BU 0.00 1.50 0.17 0.75 -0.05 0.60 0.00 0.00 1.50 0.00 0.62 0.63

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