You are trying to estimate the cost of equity for a privately owned railroad company called the Illinois-Pacific Railroad. You know that the company's cost of debt is 4% and its debt-to-enterprise value ratio is 30%. You have collected the following information on publicly traded railroads that are comparable. All of these railroads have no excess cash. You also know that the risk-free rate is 2% and the market risk premium in 5%. Which of the following statements is true? Select one. Market Company Beta Capitalization (in $ Market Value of Cost of Debt billions) Debt (in $ billions) UNP 1.05 133.20 24.70 3.0% CSX 1.21 59.40 16.30 3.2% NSC 1.38 54.70 12.20 3.1% KSU 0.96 18.30 3.20 2.9% Ol. You can not calculate the cost of equity for the privately held railroad as the average cost of equity across the comparable firms because the privately held railroad has a higher debt-to-enterprise value ratio than the comparable firms. O II. You can calculate the cost of equity for the privately held railroad as the average cost of equity across the comparable firms because the privately held railroad has a similar debt-to-enterprise value ratio than the comparable firms. O III. You can not calculate the cost of equity for the privately held railroad as the average cost of equity across the comparable firms because the privately held railroad has a lower debt-to-enterprise value ratio than the comparable firms. O IV. You can always calculate the cost of equity for the privately held railroad as the average cost of equity across the comparable firms regardless of whether debt-to-enterprise value ratio of the private railroad is different from the one for the comparable firms