Suncorp Limited is undertaking a capital budgeting analysis.The firm's beta is 1.5.The rate on Treasury notes is 5%,and the return on the ASX/S&P 200 index is 12%.What is the cost of Suncorp's common equity?
A) 13.3%
B) 15.5%
C) 17.7%
D) 19.9%
Correct Answer:
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