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You have the following market data: (1) adjusted beta of 0.8; (2) risk-free rate of 3.0%, (3) equity risk premium (i.e. ERP or excess of

You have the following market data: (1) adjusted beta of 0.8; (2) risk-free rate of 3.0%, (3) equity risk premium (i.e. ERP or excess of market return over risk free rate) of 5.0%, (4) size risk premium of 6.0%; and (5) industry risk premium of -1.0% (i.e. negative 1.0%). Calculate the cost of equity using the adjusted CAPM and a build-up method. Show your calculations and results.

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