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1. Which of the following statements about a firm's cost of equity capital is NOT valid a. It represents the rate of return required by

1. Which of the following statements about a firm's cost of equity capital is NOT valid

a. It represents the rate of return required by investors in the firm's stocks.

b It can be estimated by using the CAPM model.

c It should be higher than the expected return for projects the firm is considering.

d. It is a linear function of the systematic risk for the security.

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