5. The cost of retained earnings Aa Aa the required rate of If a firm cannot invest retained earnings to earn a rate of return return on retained earnings, it should return those funds to its stockholders. The cost of equity using the CAPM approach The current risk-free rate of return (FRF) is 4.67%, while the market risk premium is 5.75%, the Roosevelt Company has a beta of 0.92. Using the Capital Asset Pricing Model (CAPM) approach, Roosevelt's cost of equity is 11.95% 9.96% 10.96% 10.46% The cost of equity using the bond yield plus risk premium approach