4. Your employer, Saskatoon Building Associates (SBA), is planning a condominium project in downtown Saskatoon, code named Block1. The manager asked you to estimate the cost of equity capital for this project. You find Ace Construction Group (ACG), a firm that specializes in building condominium projects in Saskatoon. From market data you estimate ACGs required return on equity to be 18%, the risk free rate to be 5%, and the expected return on the TSX (the market) is 12.5%. From the financial statements, you discover that ACG has a debt to total asset ratio of 0.75. However, your plans are to finance Block1 using a debt to total asset ratio of 0.60. What should be your estimate of the cost of equity capital for Block1? (8 marks) Show math with formulas