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Treasury bills currently have a return of 3.5% and the market risk premium is 8%. If a firms common stock has a beta of 1.6,

Treasury bills currently have a return of 3.5% and the market risk premium is 8%. If a firms common stock has a beta of 1.6, what is its cost of equity?

a. 10.7%

b. 12.8%

c. 13.1%

d. 16.3%

e. 18.4%

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