Determine the cost of capital for electrostat

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Your firm is planning to invest in a new electrostatic power generation system. Electrostat Inc. is a firm that specializes in this business. Electrostat has a stock price of $25 per share with 16 million shares outstanding. Electrostat's equity beta is 1.18.It also has 220 million in debt outstanding with a debt beta of 0.08. The risk-free rate is 3%,and the market risk premium is 6%. Determine the cost of capital for Electrostat.

Reference no: EM132703732

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