URGENT !!

The total market value of the common stock of the Okefenokee Real Estate Company is $2.5 million, and the total value of its debt is $10.5 million. The treasurer estimates that the beta of the stock is currently 1.8 and that the expected risk premium on the market is 7%. The Treasury bill rate is 3%. Assume for simplicity that Okefenokee debt is risk-free. The company tax rate is 21%.

Multiple Choice :

4.9%

7.7%

6.3%

10.21%

5.4%