Suppose a New Zealand company has a domestic beta of 1.0. Expected return on the New Zealand market portfolio is 12 percent, and the New Zealand T-bill rate is 6 percent. If the world beta measure of this company is 0.80, then we can say that

Select one: a. if the New Zealand capital markets are fully integrated with the rest of the world, this companys cost of equity capital would be one-third lower than if New Zealand markets were segmented.

b. if the New Zealand capital markets are fully integrated with the rest of the world, this companys cost of equity capital would be 20% lower than if the New Zealand markets were segmented.

c. internationalizing the companys cost of capital would depress the price of IBM shares.

d. if the New Zealand capital markets are fully integrated with the rest of the world, this companys cost of equity capital would be 10% lower than if the New Zealand markets were segmented.