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Nike needs you to calculate its cost of equity. Nike's target B/S ratio is 0.5, its cost of debt is 10%, the risk-free rate is

Nike needs you to calculate its cost of equity. Nike's target B/S ratio is 0.5, its cost of debt is 10%, the risk-free rate is 5%, and the market risk premium is 8%. Below are two of Nike's competitors who have similar business operations. Assume the corporate tax rate is 30%.  


CompetitorEquity BetaB/SCost of Debt  


Competitor 11.51.011%

Competitor 21.10.610%



What is Nike's estimated cost of equity?

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