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United Foods is considering a new investment. It has an equity beta of 0.93 and a debt to assets (B/(B+S) ratio of 0.45. Assume that

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United Foods is considering a new investment. It has an equity beta of 0.93 and a debt to assets (B/(B+S) ratio of 0.45. Assume that the CAPM holds, the risk-free rate of interest is 5%, and the expected market premium (E(m)-risk-free rate) is 8.5%. Debt is risk- free. United plans to finance the project with 100% equity. What is the cost of unlevered equity for the food project. (10 points)

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