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11.ABX is an all-equity company. The beta of its common stock is .9. The market risk premium is 7% and the risk-free rate is 3%.

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11.ABX is an all-equity company. The beta of its common stock is .9. The market risk premium is 7% and the risk-free rate is 3%. ABX is considering buying another all-equity company, CDY. CDY's common stock's beta is 1.3. What is the appropriate required rate of return on the ABX's investment in CDY? 1 a. 12.1% b. 10% c. 9.3% d. 20%

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