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Historical returns for the past three years for Stock B and the stock market portfolio are Stock B: 30 percent, 0 percent, 30 percent; market

Historical returns for the past three years for Stock B and the stock market portfolio are Stock B: 30 percent, 0 percent, 30 percent; market portfolio : 18 percent, 20 percent, 28 percent. The expected market return is 14 percent. Calculate the required rate of return (cost of equity) for Stock B using the CAPM. (The risk-free rate of return = 4%.)

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