Applied MSA has a beta of 1.18. If 3-month Treasury bilts currently yeld 3% and the return on the market 21 ons, what is Applied MSAs cost of equity capital? Question 8 We have fixed operating costs of $3m and a variable cost ratio (i.e., variable costs as a fraction of sales) of 60%. We have $9.8m in bonds outstanding at an interest rate of 6%. We have 0.90m shares of preferred stock which pays a $1.2 dividend. We are in the 21% tax tratket. and our forecasted sales for next year are $15m. What is our degree of financial leverage