You given the task to estimate the cost of capital. This type of operation is using all-equity financing. Solve with the following information. The beta is 1.870. The current 1-year Treasury bill rate is 0.35% short-maturity treasury rate will be used. The historical 1-year treasury rate average is 4.25%. The historical average return on a broad stock market index is 10.25% (over the same time period as the T-bill average). Solve for the cost of equity for this project.

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