Question: Question 20 QUESTION 20 Milburn plc is a UK-based MNC looking to raise equity finance locally for its subsidiaries in Slakrovia. The company's overall equity

Question 20

Question 20 QUESTION 20 Milburn plc is a UK-based MNC looking to

QUESTION 20 Milburn plc is a UK-based MNC looking to raise equity finance locally for its subsidiaries in Slakrovia. The company's overall equity beta is 0.9 and Milburn plc estimate that their local subsidiary will have an equity beta of 1.3. The UK has a risk-free rate of 2.2% and the equity risk premium on the UK stock exchange is 5.8%. In Slakrovia, the risk-free rate of return is 3.4% and the equity risk premium on the local stock exchange is estimated to be 7.4%. What is the expected cost of the locally raised equity finance

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