At December 31,2023, Day-Brite Inc.’s market value of equity…
At December 31,2023, Day-Brite Inc.’s market value of equity was $8 billion and its total market value was $13 billion. Day-Brite’s assumed statutory tax rate was 25%, its pretax borrowing rate was 4%, and its estimated market beta was .65. Assume also that the expected risk-free rate is 2.5% and the expected market risk premium is 5%. Estimate Day-Brite’s cost of equity capital