Please consider the following information for the next 4 questions (Q17 – Q20). university Inc. is for sale and there is a price tag of $225,000.ÿYour company, ABC, who is considering the purchase,ÿhas a beta of 1.5, the market is expected to have a 20% return and the risk-free rate is 5%. The forecasted free cash flows for the next 4 years for Universityÿare 7000 (FCF1), 22000(FCF2), 0(FCF3), and 50000 (FCF4). The company is expected to grow at 4% indefinitely after that.ÿYour company has a debt/equity ratio of 2/3 and the applicable tax rate is 35%.ÿABC’s cost of debt (before taxes) is 8%. What is the cost of equity for ABC company?