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Treasury bills currently have a return of 2.5% and the market risk premium is 7%. If a firm has a beta of 1, what is its cost of equity? What is the expected return according to the Capital Asset Pricing Model? (Here, the cost of equity and the CAPM expected return are, as is pretty much always the case, equal.) O 7% O 9.5% 12% O 5% 0 4.5%