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Question 2 1 pts The risk free rate of return is 1.5% and the market risk premium is 6%. Rogue Transport has a beta of 2.2 an

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Answer #1

Given,

Risk free rate = 1.5%

Market risk premium = 6%

Beta = 2.2

Solution :-

Cost of retained earnings = risk free rate + (beta x market risk premium)

= 1.5% + (2.2 x 6%)

= 1.5% + 13.2% = 14.7%

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