What is the equity cost of capital, given the below data:- Global Stone is valuing its subsidiary, Mason International. It will use the Capital Asset Pricing Model (CAPM) to calculate the equity cost of capital and WACC. Mason is not a small company. What is the equity cost of capital, given the following data:- R_f = Risk-free rate of return 1% R_D = Interest rate on company debt 4% = Beta representing level of nondiversifiable risk associated with the companys return 1.4 rp_gm = Equity risk premium general market 5% Rp_sc = Equity risk premium small company 4% = Unsystematic risk factor Zero D/E = Debt/Equity ratio (market) 1:1 _c = Tax rate 21% _a = Time period for amortization of intangibles 40 yrs

Group of answer choices

8.575%

6.5%

8%

10%