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Suppose it's January 2021 and you would like to estimate the unlevered cost of capital (ru) for Cowbell Corp. The current share price of Cowbell
Suppose it's January 2021 and you would like to estimate the unlevered cost of capital (ru) for Cowbell Corp. The current share price of Cowbell is $18 and there are 10 million shares outstanding. You have estimated Cowbell's equity beta as 1.25, and its cost of debt (rD) as 2.75%. The risk-free rate is 1.9% and the market risk premium is 5%. In addtion, the table below shows the current balance sheet of the firm. Assume that all cash and short-term investments are excess cash. Based on the information provided, what is the best estimate the unlevered cost of capital for Cowbell? Select one. 1.6.80% 2.5.02% 3.5.60% 4. 8.15% 5.6.91% Suppose it's January 2021 and you would like to estimate the unlevered cost of capital (ru) for Cowbell Corp. The current share price of Cowbell is $18 and there are 10 million shares outstanding. You have estimated Cowbell's equity beta as 1.25, and its cost of debt (rD) as 2.75%. The risk-free rate is 1.9% and the market risk premium is 5%. In addtion, the table below shows the current balance sheet of the firm. Assume that all cash and short-term investments are excess cash. Based on the information provided, what is the best estimate the unlevered cost of capital for Cowbell? Select one. 1.6.80% 2.5.02% 3.5.60% 4. 8.15% 5.6.91%
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