Question: Your company EuropeCo a conglomerate of food beverages and consumer
Your company, EuropeCo (a conglomerate of food, beverages, and consumer products), has announced its intention to purchase S˜ao Paolo Foods (introduced in Question 1). If the German risk-free rate is 5 percent and the beta of EuropeCo is 0.9, what is the cost of capital for S˜ao Paolo Foods once under EuropeCo control?
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