Alpha's beta is 1.06, the present T-bond rate is 6%, and the return on the S & P 500 is 15.25%. What is Alpha's cost of common equity using the CAPM approach?
A) 21.25%
B) 15.81%
C) 9.25%
D) 6.32%
Correct Answer:
Verified
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A) 6.20%.
B)
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