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25. The following financial information is available on Rawls Manufacturing Company: Current per share market price $48.00 Beta 1.1 Expected rate of return on market
25. The following financial information is available on Rawls Manufacturing Company: Current per share market price $48.00 Beta 1.1 Expected rate of return on market 12.0% Risk-free rate 6.0% Rawls can issue new common stock to net the company $44 per share. Determine the cost of internal equity capital using the capital asset pricing model approach. (Compute answer to the nearest 0.1%.) a. 12.9% b. 12.6% c. 13.0% d. 11.8%
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