What is the appropriate cost of capital for kaui surf boards

Reference no: EM13288717

Kaui Surf Boards is seeking to raise capital from a large group of investors to expand its operations. Suppose these investors currently hold the Dow Jones portfolio, which has a volatility of 15% and an expected return of 10%. The investment is expected to have a volatility of 30% and a 15% correlation with the Dow Jones. If the risk-free interest rate is 4%, what is the appropriate cost of capital for Kaui Surf Boards' expansion?

Reference no: EM13288717

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