Computing cost of capital

Reference no: EM1373102

A company is applying capital budgeting to a foreign investment opportunity in England. The risk free rate in England is 3.83% and risk free rate in the US is 3.56%. Regressing the company's return against FTSI results in beta of 1.20. The historical return on the FTSI is 9%. Compute the cost of capital to evaluate the project if the cash flows are in pounds and hedged against currency risk. Suppose all equity financing. {Show your all computations}

Reference no: EM1373102

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