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JKL Corporation, a company devoted primarily to paper products, is estimating the cost ot equity appropriate tor a vegetable processing plant it is planning to
JKL Corporation, a company devoted primarily to paper products, is estimating the cost ot equity appropriate tor a vegetable processing plant it is planning to build. JKL Corp. has an equity beta of 1.1] and a debt ratio {DI[D+E}} of 0.3. Aoomparable (vegetable processing] rm has an equity beta of 0.8 and a debt ratio of 0.2.Assume a risk free rate of 5% and a market risk premium of 8%. What cost of equity should JKL use in this situation? O rm 0 11.4% 0 12.3% 0 13.0%
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