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Question 4 (1 point) Currently, Company Y has no debt (i.e., leverage=0). The CEO of Company Y considers increasing leverage (=debt/(debt+equity)) to 0.4 (i.e., 40%

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Question 4 (1 point) Currently, Company Y has no debt (i.e., leverage=0). The CEO of Company Y considers increasing leverage (=debt/(debt+equity)) to 0.4 (i.e., 40% leverage). Currently, Company Y's CAPM beta is 2.4. The cost of debt will be 5%, riskfree rate is 2%, and market return is 10%. Assume that the corporate tax rate is ZERO. Your task, as the CFO of Company Y, is to provide the cost of capital under this proposed capital structure (i.e., 40% leverage). What is the weighted average cost of capital under the proposed capital structure (i.e., 40% leverage)? O 0.12 0.32 0.42 0.22

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