3. The Limited is considering expanding into South America. The following information is available: The beta for the Limited is 1.40. The treasury bond rate is 7%, and the project analy- sis will be done in dollars. The risk premium for South American countries is expected to be 7.5%. Brady bonds issued by South American countries trade at a premium of 2% over the treasury bond . rate. a. Estimate the cost of equity to use in evaluating the new South American stores. b. Explain your reasoning and the conditions under which you might have decided differently