Assume that a companys market beta equals 0.8, the risk-free rate is 5%, and the market return equals 8%. The companys cost of equity capital is close to

A) 6.4%

B) 7.4%

C) 10.4%

D) 11.4%

Assume that a company has $1.2 billion in debt, its cost of debt (pre-tax) is 5%, it has $2 billion in equity, and its cost of equity capital is 7%. The tax rate is 20%. The companys WACC is close to

		A) 5.88%
		B) 6%
		C) 6.25%
		D) 6.5%