Fed up with the situation in Lebanon you decided to sell your house and move to Congo. You plan to open a restaurant over there (all equity financed) and you are going to examine the value of the business. The market in Congo is very limited and has only few available data. So you collect more data: Congo Rating Congo B- Standard Deviation of equity market in Congo 53% Standard Deviation of Long term Gov bond 27% Unl. R- T-bills Congo Gov (1 year $ Denominated) 4.5% Beta square Olive Garden 1.2 0.45 US Red Lobster 1.2 0.35 T-bills US (1-year) 3.50% Steakhouse Outback 1.2 0.38 T-bonds US (10 years) 5.50% TGI 1 0.5 Default spread on B- rated countries 4% Apple Bees 1.1 0.24 Mature Market risk premium (US) 4% Waffle House 1.4 0.63 14- What is the risk free rate you should use for your project? a. 3.5% b.4.5% c.5.5% d.6.5% e.7.0% 15- What is the country equity risk premium that you should use? a. 2% b.3.93% c.4.96% d.6.15% e. 7.85% 16- What is the cost of equity that you should use (use simple average)? a. 14.73% b. 16.26% c. 18.43% d. 19.93% e. 20.48%