Answer:
Cost of Equity will be= 14.35%
Step-by-step explanation:
Cost of equity can be calculated as Risk free return+[beta*Risk Premium]
IN given case Risk free return will be yield on bond=10.05%
Risk Premium given=3.85%
But beta of company is not given, and market beta also not given, hence we can not calculate beta.
we can assume beta of company is 1, then-
Cost of Equity will be= 10.50%+3.85%= 14.35%
Note- Retained earning also not given so that we calculate based of retain earning.