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Business, 26.08.2019 19:30 ft2134

Jkl corporation, a company devoted primarily to paper products, is estimating the cost of equity appropriate for a vegetable processing plant it is planning to build. jkl corp. has an equity beta of 1.0 and a debt ratio (d/(d+e)) of 0.3. a comparable (vegetable processing) firm has an equity beta of 0.8 and a debt ratio of 0.2. assume a risk-free rate of 5% and a market risk premium of 8%. what cost of equity should jkl use in this situation?

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