a ? 11. You are helping the financial managers of a grocery store estimate a cost of capital to use in assessing new stores. The grocery store, which is publicly traded, has a beta of 1.40 and a debt/equity ratio of 70%; the after- tax cost of debt is 5.5%. The managers are trying to esti- mate costs of capital at two different stores. One is a suburban store with little competition for which the cash flows can be estimated fairly accurately. The other is a store in New York City, where the estimates have much more potential for error. (The riskfree rate is 7%) a. What cost of capital would you charge for these two stores? b. Would you charge a higher cost of capital for the New York City store? Why or why not? ortimate a cost of capital to use ? is