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A firm has a beta of 1.2. The market return equals 14 percent and the risk-free rate of return equals 6 percent. The estimated cost

A firm has a beta of 1.2. The market return equals 14 percent and the risk-free rate of return

equals 6 percent. The estimated cost of common stock equity is

4 Points

  • 14 percent.
  • 15.6 percent.
  • 6 percent.
  • 7.2 percent.

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