28. MNC's Cost of Capital Newark Co. is based in the United States. About 30 percent of its sales are from exports to Portugal. Newark Co. has no other interna- tional business. It finances its operations with 40 per- cent equity and 60 percent dollar-denominated debt. It borrows its funds from a U.S. bank at an interest rate of 9 percent per year. The long-term risk-free rate in the United States is 6 percent. The long-term risk-free rate in Portugal is 11 percent. The stock market return in the United States is expected to be 13 percent annually Newark's stock price typically moves in the same direction and by the same degree as the U.S. stock market. Its earnings are subject to a 20 percent corpo- rate tax rate. Estimate the cost of capital to Newark Co