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Suppose the asset beta for the drug store industry is 1, the risk-free rate is 3%, and the market risk premium is 7%. What is

Suppose the asset beta for the drug store industry is 1, the risk-free rate is 3%, and the market risk premium is 7%. What is the cost of equity capital for Walgreens if its D/V ratio is .3 and their cost of debt is 3%? (Assume Walgreens plans to maintain this D/V ratio.)

a. 12%

b. 13%

c, 11%

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