Zonk Corp
the Following Data Pertains to Zonk Corp -Assuming That Riskless Rate Is 4

Zonk Corp.
The following data pertains to Zonk Corp., a manufacturer of ball bearings (dollar amounts in millions) :
$\begin{array}{l}\begin{array} { l } \text { Tatal assets } \\\text { Interest-bearing debt } \\\text { Average pre-tax borrowring } \\\text { Cammon equity: } \\\text { Badk value } \\\text { Market value } \\\text { Incame tax rate } \\\text { Market equity beta }\end{array}\begin{array} { r } \$ 7460\\\$ 3652\\10.5 \%\\\\\$2950 \\\$13685 \\35\% \\1.13\end{array}\end{array}$
-Assuming that riskless rate is 4.6% and the market premium is 7.3%,calculate Zonk's cost of equity capital:

A) 10.4%
B) 7.69%
C) 11.89%
D) 8.28%