Problem 30 A late penalty of 5% will apply to new answers. Intro You've gathered the following information for Holly Corp. . Current debt-to-equity ratio: 0.6 Current beta: 1.03 Risk-free rate: 2% Expected return on market portfolio: 8% Tax rate: 40% IB Attempt 1/10 for 9.5 pts. Part 1 What is the current cost of equity? Correct Using the CAPM: Rg = R +B(E(RM) - Rj) = 0.02 + 1.03 - (0.08 - 0.02) = 0.0818 IB A ttempt 1/10 for 9.5 pts. Part 2 What would be the firm's cost of equity if it didn't have any debt? B+ decimals Submit