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Bailey Corporation has decided to expand operations to the East Coast of the United States

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Bailey Corporation has decided to expand operations to the East Coast of the United States. The company needs $200 million and its common shares are currently selling for $88 per share. As the company's CFO, you have collected the following information: (1) the company's beta coefficient is 1.10, (2) the current risk-free rate of return is 1.35 percent, and (3) the expected rate of return on a diversified portfolio of S & P common stocks is 9.00 percent. What is your best estimate of Bailey Corporation's cost of equity capital? Note - you may not need all of the information provided to determine the final value.