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The firm is undertaking a capital budgeting analysis. The firms beta is 1.5. The rate on Treasury bond is 5%, and the return on the

The firm is undertaking a capital budgeting analysis. The firms beta is 1.5. The rate on Treasury bond is 5%, and the return on the S&P 500 index is 12%. What is the appropriate cost for retained earnings in determining the firms cost of capital?

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