Adapted from the book: Corporate iF Fridson, and George H. e Finance A Practical Approach by Michelle R Troughton, pages 166-167 Clayman, Martin S Jrgen Knudsen has been hired to provide pension plan managing a global la industry expertise to Henrik Sandell, CFA, an analyst for a rge-cap fund internally. Sandell is concerned about manufacturer Kruspa AB, Kruspa currently operates in 80 countries, with the previous year's global revenues at 5.6 billion. Financial information: market risk premium, Sweden Risk-free rate of interest, Sweden Industry debt-to-equity ratio Market value of Kruspa's debt Market value of Kruspa's equity Kruspa's equity beta Kruspa's before-tax cost of debt Corporate tax rate 4.82 percent 4.25 percent 0.3 900 million 2.4 billion 1.3 9.25 percent 37.5 percent 1. What is the Kruspa's debt-equity ratio? A 0.375 B. 2.667 C. 0.3 2. Using the capital asset pricing model (CAPM), Kruspa's cost of equity capital for its typical project is closest to A. 7.62 percent B. 10.52 percent C. 12.40 percent D. 14.84 percent 3. Sandell is interested in the weighted average cost of capital of Kruspa AB. This weighted average cost of capital (WACC) is closest to A. 7.65 percent B. 9.23 percent C. 10.17 percent D. 10.52 percent