The equity beta for Adobe Online Company is 1.29. Adobe Online has a debt-to-equity ratio of 1.0.
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The equity beta for Adobe Online Company is 1.29. Adobe Online has a debt-to-equity ratio of 1.0. The expected return on the market is 13 percent. The risk-free rate is 7 percent. The cost of debt capital is 7 percent. The corporate tax rate is 35 percent.
a. What is Adobe Online’s cost of equity?
b. What is Adobe Online’s weighted average cost of capital?
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