Use the following information relative to the risk $($how sensitive they are compared with the changes in the market$)$ of some companies to answer the question$($s$)$ below:

Shares Beta

"Karina$-$Kosta" $0\mathrm{.}75$

"Elena$-$Yana" $0\mathrm{.}95$

"Milko$-$Boba" $1\mathrm{.}05$

"Ivcho$-$Valerka" $1\mathrm{.}20$

Assume that the risk$-$free rate of interest is $3\%$ and you estimate the market's expected return to be $9\%.$

Which firm has the highest cost of equity? $(2$ marks$)$

Give some criteria that may be used to choose between the various sources of debt and equity financing. $(2$ marks$)$