QUESTION 20 Moonduke plc is a UK-based MNC looking to raise equity finance locally for its subsidiaries in Pitrovia. The company's overall equity beta is 1.1 and Moonduke plc estimate that their local subsidiary will have an equity beta of 1.4. The UK has a risk-free rate of 2.0% and the equity risk premium on the UK stock exchange is 4.9%. In Pitrovia, the risk-free rate of return is 2.9% and the equity risk premium on the local stock exchange is estimated to be 5.6%. What is the expected cost of the locally raised equity finance