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The common stock of Rawls Manufacturing Company has a beta of 0.95. If the current risk-free rate is 6.0% and the expected return on the

The common stock of Rawls Manufacturing Company has a beta of 0.95. If the current risk-free rate is 6.0% and the expected return on the stock market as a whole is 13%, determine the cost of equity capital for the firm (using the CAPM).

6.0%

12.7%

13.0%

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