question 15

Blue Sky Corporation has a beta of 1.74 and a marginal tax rate of 21%. The expected return on the market is 10% and the return on a Treasury security is 1.31%. Estimate the firm's cost of internal equity. SET YOUR CALCULATOR TO 4 DECIMAL PLACES AND ROUND TO 2 DECIMAL PLACES AT THE END. DO NOT ENTER THE % SIGN. IF YOUR ANSWER IS 7.70%, FOR EXAMPLE, ENTER 7.70. 16.98