Estimating the cost of Equity Capital Kellogg Company manufactures cereal and other convenience food under its many well-known brands such as Kelloggvs, Keebler, and Cheest. The company, with over $135 billion in annual sales worldwide, partially finances its operation through the issuance of debt. At the beginning of its 2015 fiscal year, it had 36.5 bilion in total debt. At the end of fiscal year 2015. its total debt had increased to 566 billion Its fiscal 2015 Interest expense was $227 million and its assumed statutory tax rate was 37% Kellogg has an extmated market beta or 0.30. Assume that the expected risk free rate is 2.5 and the expected market premium What does Kelloges market beta imply about its stock returns? A bera of 0.30 indicates Kellogg's stock is less volatile than the market index A beta of 0.30 indicates Kellogg's stock is more volatit than the market index A beta of 0.30 indicates Kellogg's stock moves perfectly with the market index Catimate Kellos cost of equity capital Round answer to one decimal place (ex. 0.0245 - 25 33