A. Butcher Timber Company hired your consulting firm to help them estimate the cost of equity. The yield on the firm's bonds is 6.75%, and your firm's coonomists believe that the cost of equity can be estimated using a risk premium of 3.85N over a firm's own cost of debt. What is an estimate of the firm's cost of equity from retained earnings? a. 5.309 b. 7.014 c. 10.60% d. 2.900 e. 4.11m Rebello's preferred stock pays a dividend of \$1.00 per quarter, and it sells for $55.00 per share. What is its effective annual (not nominal) rate of return? a. 8.114 b. 3.64% c.7.40\% d. 7.27% e. 7.47% You hold a diversified $100,000 portfolio consisting of 20 stocks with $5.000 invested in each. The portfolio's beta is 1.12. You plan to sell a stock with b 0.90 and use the proceeds to buy a new stock with b=1.50. What will the portfolio's new beta be? Do not round your intermediate calculations. a. 1.165 b. 1.310 c. 1.195 d. 1.150 e. 1.500 0 Brien Inc has the following data: rRF=5.00%;RPM=9.00%; and b=1.30. What is the firm's cost of equity from retained earnings based on the CAPM? a. 15.50% b. 18.20% c. 15.30% d. 14.00% e. 16,70%