Question A firm has a market capitalization of $56 million, $34 million in A rated debt, and $10 million in cash. The firm's equity beta and debt beta are estimated to be 1.66 and 0.05, respectively. You are given that the risk-free interest rate is 3% and the market risk premium is 7%. Assume that the firm's cash investment is risk-free. Estimate the firm's asset cost of capital. Possible Answers 10.6% B 10.7% 10.9% D 11.1% E 11.3%