Question: The correct answer is B. please explain how B is the correct answer. 13, A US firm has $1 billion in equity by market value.

The correct answer is B. please explain how B is the correct answer.

13, A US firm has $1 billion in equity by market value. The expected return on the equity is 8.6%, t also has 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% 9.48% 10.17% a. b. c. d. 11.23% None of the above e

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