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Fairy Co Ltd has an asset beta of 0.9. The market return is 14 per cent, and the risk-free rate is 5 per cent. If

Fairy Co Ltd has an asset beta of 0.9. The market return is 14 per cent, and the risk-free rate is 5 per cent. If Fairys debt/equity ratio is 0.50, what is Fairys cost of equity capital? What is the return on Fairys assets if it has issued debt at the risk-free rate? Ignore taxes.

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