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9. Assume that a company has a beta of .85 and the risk-free rate is 4%. If the market risk premium is 8% calculate cost

9. Assume that a company has a beta of .85 and the risk-free rate is 4%. If the market risk premium is 8%

calculate cost of equity capital, using the capital asset pricing model.

a. 8.00%

b. 6.80%

c. 10.80%

d. 12.88%

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