Your company XXX is looking at YYY company to purchase it. The current price tag of YYY is $1.2 million. XXX has a beta of 1.5. The market is expected to have a return of 19% and the current 10-year t-bond pays 3.5%. YYY company is expected to have cash flows of $250,000 in year one, $150,000 in year two, and $250,000 in year four. The YYY company is expected to grow at 5% indefinitely after that. XXX company has a debt to equity ratio of 1,3 and a tax bracket of 35%. The cost of debt (before taxes) is estimated to be 7%. What is the cost of equity for XXX company? 26.75% 32.05% 23.25% 24.21% 29 77%