You have been asked to calculate the cost of capital for CMR Inc. The company owns 2,000 zero-coupon bonds. Each zero-coupon bond has a face value of $1,000, will mature in 6 years, and is currently quoted at 70% of face value. The company has 500,000 common shares outstanding, and each share currently trades at $15. You have decided to use the CAPM model to calculate the cost of equity. The risk-free rate is 5% and the market risk premium is 10%. The company's beta is 2. The company also owns 200,000 preferred shares. Each share trades at $10 and the constant annual preferred dividend per share is $1.5. Finally, the company is subject to a tax rate of 40%. Question 9 options: 20.4% 37.07% 23.4% 50%