Use the Table for the Question(s)below

question 38

Multiple Choice

Use the table for the question(s) below.
Capital Structure and Unlevered Beta Estimates for Comparable Firms
-If the risk-free rate of interest is 6% and the market risk premium has historically averaged 5%,then the cost of capital for Nike is closest to:

• A)14.7%.
• B)10.2%.
• C)9.1%.
• D)13.5%.

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Definitions:

Hard Enough

A phrase indicating a task or challenge that presents a sufficient level of difficulty.

Lazy

A lack of willingness to work or use energy, often characterized by inactivity and a tendency to avoid effort.

Closed System

A theoretical concept in various sciences referring to a system that does not interact with others systems or its environment, exchanging neither matter nor energy.

Open System

A social system in which status is based on achieved attributes.