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Suppose risk-free rate on Treasury bonds is 2% and the current market return is 5% and the beta of a company's stock is estimated to

Suppose risk-free rate on Treasury bonds is 2% and the current market return is 5% and the beta of a company's stock is estimated to be 1.5, what is the company's cost of equity (retained earnings)?

7.5%

7.3%

6.8%

6.5%

6.9%

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