13. If a company's profits and the value of it's assets are generally more sensitive to economic cycles (i.e. very low in recessions but very high during economic booms) than the average company in the market, what is generally true about it's cost of equity all else equal? Select the best option below.

a) The cost of equity should be higher than the expected return on the market

b) The cost of equity should be lower than the expected return on the market

c) The cost of equity should be less than the risk-free rate

d) The cost of equity should be lower than the expected return on the debt

14.You have the following data for your company.

Book Value of Equity: $170

Book Value of Debt: $170

Market Value of Equity: $680

Required rate of return on equity: 12%

Required rate of return on debt: 7%

Corporate tax rate: 25%

The company's debt is assumed to be is reasonably safe

What is the weighted average cost of capital for this company?