Your Firm Is Planning to Invest in a New Electrostatic

question 76

Multiple Choice

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:

• A)7.50%.
• B)7.75%.
• C)9.50%.
• D)10.10%.

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Definitions:

Thoughts of Suicide

Refers to contemplation or consideration of ending one's own life.

Risk for Suicide

Refers to the potential or likelihood that an individual will attempt to take their own life or engage in behavior with the intention of doing so.

Intentional Overdose

The deliberate act of consuming a toxic amount of substances, often with the intent to harm oneself.

No-Suicide Contract

An agreement between a patient and therapist in which the patient agrees not to harm themselves and to seek help if suicidal thoughts occur.