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The Valley Power Company common stock has a beta of 0.90. If the current risk-free rate is 4.5% and the expected return on the stock
The Valley Power Company common stock has a beta of 0.90. If the current risk-free rate is 4.5% and the expected return on the stock market as a whole is 15%, determine the cost of equity capital for the firm using the Capital Assets Pricing Model (CAPM). Show work. a. 13.95% b. 11.8% c. 11.9% d. 14.1%
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