Rivoli Inc. hired you as a consultant to help estimate its cost of capital. You have been provided with the following data: Do $1.00; Po - $30.00; and g 8.00% (constant). Based on the DCF approach, what is the cost of equity from retained earnings? Do not round your intermediate calculations. a11.60% b. 11.09% c113) d.3.60% e3.89% Assume that your uncle holds just one stock, East Coast Bank (ECB), which he thinks has very little risk. You agree that the stock is relatively safe, but you want to demonstrate that his risk would be even lower if he were more diversified. You obtain the following returns data for West Coast Bank (WCB). Both banks have had less variability than most other stocks over the past 5 years. Measured by the standard deviation of returns, by how much would your uncle's risk have been reduced if he had held a portfolio consisting of 50% in ECB and the remainder in WCB? (Hint: Use the sample standard deviation formula.) Do not round your intermediate calculations Year ECB WCB 40.00% 40.00% -10.00% 13.00% 30.00% 5.00%) 5.00% -10.00% 13.00% 30.00% Average return 13.60% 13.60% Standard deviation- 21.62% 21.62% a. 5.17 pp b. 323 pp 087pp 4.0.78 pp 2.89 pp