You are trying to evaluate a private firms potential as a good investment opportunity. Your mentor at the investment bank you interned during the summer told you to collect information on comparable firms, which will help you find the WACC of the private firm. The private firm has ND/E ratio of 2. The risk free rate is 2%. Market risk premium is 5%. Cost of debt for the private firm is assumed is 6%. The tax rate is 50%.

The following table lists the information you have gathered:

Firm Beta Equity Equity (Million) Debt (Million) Cash (Million) A 1.3 20 11 6 B 1.1 15 8 2 C 0.9 10 6 3 D 0.8 5 7 2

What is the cost of equity for the private firm?