New common equity is raised: by retaining some of the current year's earnings None of these are correct by issuing new common stock by retaining some of the current year's earnings and/or by issuing new common stock by taking a loan from the bank Question 18 2 pts Suppose you are an analyst with the following data: Risk Free is 3.5%, market risk premium is 7%, beta is 1.2 , next year's dividend is 1.67 , price of the stock is 44 , growth is 3%, bond yield on the firm's debt is 6.75%. What is this firm's cost of equity using the CAPM method? 6.5% Nont of these are correct 6.75% 11.9% 11.3%