Answer:
The company's cost of capital will be "13%".
Step-by-step explanation:
The given values are:
Risk free rate
= 5
Beta
= 1.25
Market risk premium
= 8
Now,
⇒

On substituting the estimated values, we get
⇒

⇒

The total value will be:
=

= $

As we know,
⇒

⇒

⇒

⇒

Note: % = percent