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11.4 Cost of equity: SML. Stan is expanding his business and will sell common stock for the needed funds. If the current risk-free rate is

11.4

Cost of equity: SML. Stan is expanding his business and will sell common stock for the needed funds. If the current risk-free rate is 5.5% and the expected market return is 11.8%, what is the cost of equity for Stan if the beta of the stock is:

a. 0.61?

b.0.93?

c.0.98?

d.1.23?

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