Belin Inc. is a Czech company with substantial operations in the EU. You have been given the following information on their operations: Country EU (North) EU (South) Czech Rep Sovereign Revenues (in millions of Koruna) CDS Spread 80 120 100 0.00% 2.00% 1.00% Standard Deviation in Govt Bond 5% 8% 6% Standard Deviation of Equity 10% 12% 1296 The German Euro bond rate is 0.75%, the Czech Republic has a 10-year bond, denominated in Koruna, trading at an interest rate of 2.5% and the Czech Republic has a local currency rating that matches its foreign currency rating. a. Estimate the equity risk premium that you would use for Belin Inc. (You can assume that the equity risk premium for mature markets, i.e., markets with no default risk, is 6%.) (1.5 points) b. Estimate the cost of equity for Belin Inc., in Czech Koruna, assuming that the beta for its equity is 1.20. (1.5 points)