Sonderson Corporation is undertaking a capital budgeting analysis.The firm's beta is 1.5.The rate on six-month T-bills is 5%,and the return on the S&P 500 index is 12%.What is the appropriate cost of common equity in determining the firm's cost of capital?

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The Answer of Sonderson Corporation is undertaking a capital budgeting analysis.The firm's beta is 1.5.The rate on six-month T-bills is 5%,and the return on the S&P 500 index is 12%.What is the appropriate cost of common equity in determining the firm's cost of capital?

Sonderson Corporation Is Undertaking a Capital Budgeting Analysis