Question: Suppose you borrow $ 4 0 2 2 7 . 9 2 M when financing a gym with a cost of $ 8 9 9

Suppose you borrow $40227.92M when financing a gymwith acost of $89945.25M. You expect to generate a cash flow of $60464.23M at the end of the year if demand is weak, $97665.13M if demand is as expected and $113705.66M if demand is strong. Each scenario is equally likely. The current risk-free interest rate is 4.05%(risk of debt) and there's a 10.73% risk premium for the risk of the assets.What is the expected return of equity?
(HINT: If you need it, to compute the WACC of the firm, add the risk free plus the risk prem

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