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NEW QUESTION: 1
Consider the following information:
30 day T-Bill rate (Risk free rate) 7.2%
Common Stock Beta 0.8
Expected Rate of return for the market 15.0%
Net Worth to Total Asset Multiple .25
Calculate this firm's cost of retained earnings using the CAPM approach.
A. 13.44%
B. 12.0%
C. 9.6%
D. 10.2%
E. 22.2%
F. 7.2%
Answer: A
Explanation:
Explanation/Reference:
Explanation:
To calculate the cost of retained earnings for a firm using CAPM, one may use the following formula: Cost of retained earnings = risk free rate + ((expected rate of return on the market - risk free rate) x Beta). In this case the cost of retained earnings = 7.2% + ((15.0% - 7.2%) x 0.8 = 13.44%.

NEW QUESTION: 2
Ziehen Sie die AAA-Funktionen von links auf die richtigen AAA-Dienste rechts

Answer:
Explanation:



NEW QUESTION: 3

A. Option B
B. Option D
C. Option A
D. Option C
Answer: D


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