12 You are seeking equity investors for your start-up firm. To get an idea of what potential equity investors require as a rate of return, you decide to use the build up method. At the direction of your CFO, you gather data on three components: 1) bond yield - 6%, 2) Equity premium, and 3) a start-up premium -9%. Your firm has a beta of 1.2 and the risk free rate is 3. Using the build-up method, your estimated cost of capital is closest to 26 19.2 239 27.5%