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Assume that the current yield on long-term government bond is 9% and the market risk premium is 7%. The firms equity beta is 0.95 and

Assume that the current yield on long-term government bond is 9% and the market risk premium is 7%. The firms equity beta is 0.95 and the current yield on a one-year Government Treasury bills is 8%. Use capital asset pricing model (CAPM) to determine the firm cost of capital.

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