If the firm’s beta is 1.75, the risk-free rate is 8%, and the average return on the market is 12%, what will be the firm’s cost of equity using the CAPM approach? Group of answer choices 15.00% 16.05% 14.27% 14.00%

EBK CFIN
6th Edition
ISBN:9781337671743
Author:BESLEY
Publisher:BESLEY
Chapter11: The Cost Of Capital
Section: Chapter Questions
Problem 5PROB
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If the firm’s beta is 1.75, the risk-free rate is 8%, and the average return on the market is 12%, what will be the firm’s cost of equity using the CAPM approach? 

Group of answer choices 

15.00% 

16.05% 

14.27% 

14.00% 

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