Question: please show step by step solution 13, A US firm has $1 billion in equity by market value. The expected return on the equity is

please show step by step solution

13, A US firm has $1 billion in equity by market value. The expected return on the equity is 8.6%, t also has f 1 billion of equity in a British subsidiary. The cost of equity in the British subsidiary is 10.6%. If the exchange rate is 1.26 USD/GBP, what is the combined cost of equity? 8.80% a. b. 9.48% c. 10.17% d. 11.23% e. None of the above

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