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3 . Ted Corporation wants to estimate its cost of common equity using the Capital Asset Pricing Model. Assume the risk - free rate is

3 .

Ted Corporation wants to estimate its cost of common equity using the Capital Asset Pricing Model. Assume the risk

-

free rate is

2.5 %,

the market risk premium is

6 %

and Ted Corporation has a Beta of

. 8 .

Using the capital asset pricing model, what is Ted

s estimated cost of common equity?

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