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The asset beta for food trucks is 0.7. XYZ Food Service, which operates a fleet of taco trucks, has debt to equity ratio of 1.0.
The asset beta for food trucks is 0.7. XYZ Food Service, which operates a fleet of taco trucks, has debt to equity ratio of 1.0. The riskless rate is 4.9%, the expected return on the S&P 500 is 15.9%, and the tax rate is 22%. What is XYZ's levered cost of equity? Please give your answer to 4 decimal places.
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