Question: Nodebt Corporation is a firm whose capital structure is 100% common capital (equity). Its current beta is 0.80. The risk-free asset (T-Bill) is equal to

Nodebt Corporation is a firm whose capital structure is 100% common capital (equity). Its current beta is 0.80. The risk-free asset (T-Bill) is equal to 5% and the market risk premium is 7%.

Determine the cost of capital for this company.

a. 10.60%

b. 6.60%

c. 9.60%

d. 14.60%

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