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S Corporations common stock has a beta of .77. The interest rate on 10 year U.S. Treasury bonds is 2.00 percent. Assuming an average market

S Corporations common stock has a beta of .77. The interest rate on 10 year U.S. Treasury bonds is 2.00 percent. Assuming an average market risk premium of 5.0 percent, use the mean-variance capital asset pricing model to estimate the cost of existing common equity for S Corporation.

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