compensation or their investment isk is referred to as the cost of equity Consider this case Markung's Co. is a 100% equity-financed company (no det, or preferred stock); hence, its WACC equals its cost of common equity, Markung's Co.'s retained eaningswll be sufficient to fund its capital budget in the foreseeable tuture. The company has a beta or 1.50, the nsk-free rate is 5.0%, and the market return is 6.5%. What is Markung's Co.'s cost of equity? 16.25% 7.25% 24.13% 8.75% Markung's Co. is financed exclusively using equity funding and has a cost of equity of 13.05%. It is considering the following projects for investment next year: Project Required Investment Expected Rate of Return $5,250 $6,375 $4,575 $3,675 1 0.60% 13.65% 1410% 1310% Each project has average risk, and Markung's Co. accepts any project whose expected rate of return exceeds its cost of capital. How large should next year's capital budget be? $9,825 $15,300 O $11,525 $13,500 Seasion