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13. The Watson Company has a cost of equity of 10.6 percent at a time when the market risk premium is 8 percent and the
13. The Watson Company has a cost of equity of 10.6 percent at a time when the market risk premium is 8 percent and the risk-free rate is 3 percent. The company is considering an acquisition which they expect will increase their company's beta to 1.48. If the company completes the acquisition, what will be the firm's new cost of equity? A. 8.60 percent B. 11.40 percent C. 13.67 percent D. 14,84 percent E. 17.84 percent
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