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Risk free rate is 4% p.a., the risk premium on the market portfolio is 8.4% per year and corporate tax is 34%, CAPM holds, debt

Risk free rate is 4% p.a., the risk premium on the market portfolio is 8.4% per year and corporate tax is 34%, CAPM holds, debt is risk free; all firms listed are good comparisons. Estimate unlevered and levered cost of capital for ABC Corp.s retail division.
Comparison Firm BE D (S millions) E ($ millions) X Corp. 0.75 0.004 0.096 Y Corp. 1.00 2.300 7.700 z Corp. 1.08 0.210 0.790

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