Wallet Drug Company has just recently raised money abroad for the first time in the history of the firm. The firm finances 40 % of its assets with debt and 60% with equity, has a 30% average tax rate, and can issue bonds at a pre-tax rate of 7%. Their standard deviation of returns is roughly 1.40 times as great as the market's return, and has a correlation with the market of 0.5. If the risk-free rate of return is 5 % and the expected return on the international market portfolio is 13%.