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The Copper Mountain company is evaluating a purchase of Neft, a small oil company in Russia, and trying to estimate Nefts cost of equity. The

The Copper Mountain company is evaluating a purchase of Neft", a small oil company in Russia, and trying to estimate Nefts cost of equity.

The Copper Mountain companys analysts collect the following information:

risk free rate is 5%,

sovereign spread (risk premium) for Russia is 7%

Nefts beta is 1.5

equity market risk premium is 6.8%

What is Nefts cost of equity?

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