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Spencers Magic Shows Incorporated is financed 100% with equity and intends to remain this way....

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Finance

Spencers Magic Shows Incorporated is financed 100% with equity and intends to remain this way. Spencers common stock beta is 0.81, the expected market return (average market return) is 18%, and the risk-free rate is 3%. If all of Spencers equity is internal, what are the cost of equity and the weighted average cost of capital for Spencers?

15.15%

4.86%

14.58%

20.75%

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