Your firm is planning to invest in a new electrostatic power generation system. Electrostat Inc is a firm that specializ

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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. If the
risk−free
rate is​ 3%, and the market risk premium is​ 6%, then your estimate of your cost of capital for electrostatic power generators is closest​ to:
Question content area bottom
Part 1
A.
​7.50%.
B.
​7.75%.
C.
​10.10%.
D.
​9.50%.
Please answer. Thank you!