Please see attachment below- using the CAPM, calculate the cost of levered equity.

For this and the next 7 questions. Kwang Min Chemicals (KMC) is a Korean based chemicals company currently considering the acquisition of a smaller chemicals rm, called Widler Paints (WP). The estimated post-mergel millions) for WP are as follows: 4 $10 Interest expenses $4 Unlevered horizon value (UHV4) $200 Horizon value interest tax savings (HVITS4) $40 Widler Paints (WP) is currently nanced with 60% debt at an interest rate of 12%. Additional nancial data for WP are as follows: Total debt outstanding is currently $20 million, ore-merger beta (BL) is 2, and post-merger tax Assume the risk-free interest rate is 8%, and market risk premium (Le. market return minus riskfree interest rate) is 5%. Using the CAPM, calculate WP's cost of leveled equity; i.e. calculate rEL. O 16% O 14.2% 0 13% O 14.4% 0 None of the above