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Company A has a beta of 0.80, the rate on 6-month T-bills is 3.5%, standard deviation of returns for the market portfolio is 12.00% and the return on the S&P 500 index is 15%. The firm estimate the dividend will grow steadily at the rate of 5.40% and the marginal tax rate is 32%. What is the appropriate cost for retained earnings in determining the firm's cost of capital using CAPM? 12.50% 12.70% 13.08% 10.30%