Consider this case: Sunny Co. is a 100% equity-financed company (no debt or preferred stock); hence, its WACC equals its cost of common equity. Sunny Co's retained earnings will be sufficient to fund its capital budget in the foreseeable future. The company has a beta of 1.80, the risk- free rate is 6.0%, and the market return is 7.8%. What is Sunny Co.'s cost of equity? 33.88% 14.12% 9.24% 3.3296 Sunny 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 w Required Investment $5,250 $6,375 Expected Rate of Return 10.60% 13.65% X $4,575 14.10% Y Z $3,675 13.10% Each project has average risk, and Sunny Co, accepts any project whose expected rate of return exceeds its cost of capital. How large should next year's capital budget be? $14,625 $9,825 $15,300 $13,500