Question: The beta for Target is 0.67. The current T-Bill rate is 3.50% and the T-Bond rate is 3.00%. The MRP for T-Bills is 6.8% and

The beta for Target is 0.67. The current T-Bill rate is 3.50% and the T-Bond rate is 3.00%. The MRP for T-Bills is 6.8% and the MRP for T-Bonds is 4.5%.

A. What is the cost of equity using the T-Bill rates?

B. What is the cost of equity using the T-Bond rates?

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