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Amazon has a beta of 1 . The risk - free rate is 0 . 7 % and the expected return on the S&P 5

Amazon has a beta of

1 .

The risk

-

free rate is

0.7 %

and the expected return on the S&P

500

7 % .

What is Amazon's cost of equity from retained earnings? Now assume that the expected market risk premium is

7 % .

What is Amazon's cost of equity from retained earnings, according to the CAPM?

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