10. Assuming the CAPM or one-factor model holds, what is the cost of equity for a firm if the firm's equity has a beta of 1.2, the risk-free rate of return is 2%, the expected return on the market is 9%, and the return to the company's debt is 7%? A. 10.4%B. 10.8%C. 12.8%D. 14.4%E. None of the above. 7. Which one of the following is an example of unsystematic risk? A. The federal government lowers income taxes.B. The inflation rate increases unexpectedly.C. The GDP rises by 2% more than anticipated.D. Interest rates decline by one-half of one percent.E. An oil tanker runs aground and spills its cargo. One year ago, you purchased a stock at a price of $32.50. The stock pays quarterly dividends of $.40 per share. Today, the stock is worth $34.60 per share. What is the total amount of your dividend income to date from this investment? A. $.40B. $1.60C. $2.10D. $2.50E. $3.70