yield-to-maturity on long-term government bonds 3.4%.

Yield-to maturity on TM Industry's long-term bonds 8.1%.

Market risk premium 6%

estimated company equity beta 1.4

stock prince per share $30.00

number of share outstanding 60 million

TM industries debt value $1.2 million

tax rate 25%

1. It's cost of equity capital is what?

a. 8.16%

b. 9.98%

c. 7.04%

d. 11.08%