Question #8 Risk / Risk Premiums/ Cost of Capital Answer each of the three questions below (4) A. Risk Premium: . An investor requires a 20% return . An investment has a 30% chance of failure Determine the Risk Premium required to ensure the investor achieves their 20% return (4) B. Cost of Capital: . A company has $7,500,000 in debt . The same company has $20,000,000 in equity . Their cost of debt is 8% . Their cost of equity is 20% What is the company's cost of capital? (2) C. Risk: Which of the following indicates an undesirable outcome? a. NPV>0 b. ROI>ER c. PP