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Your research reveals that a Government of Canada Treasury Bill pays 2%. Your research also reveals that ABC Ltd. has a beta of 1.55, and

Your research reveals that a Government of Canada Treasury Bill pays 2%.

Your research also reveals that ABC Ltd. has a beta of 1.55, and that ABC has never paid a Dividend.

You estimate that the market risk premium on a common share of ABC Ltd. is 5.5% Required: Calculate the yield on the equity of ABC Ltd. Show calculations.

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