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You have the following assets available to you: Asset Expected Return Riskless debt 3.8% Portfolio of small cap stocks 9.0% Portfolio of large cap stocks
You have the following assets available to you:
| Asset | Expected Return |
| Riskless debt | 3.8% |
| Portfolio of small cap stocks | 9.0% |
| Portfolio of large cap stocks | 7.3% |
| Portfolio of growth stocks | 13.3% |
| Portfolio of value stocks | 8.8% |
| S&P500 index fund | 9.9% |
What is the cost of equity for a firm with a market beta of 3.4, a SMB beta of 1.9, and a HML beta of 2.4? You may assume this firm has an alpha of zero. Please give your answers to four decimal places - an answer of 9.54% would be represented as 0.0954.
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