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The cost of retained earnings equity for KRAS company is 7.5 percent, when the expected (risk...

The cost of retained earnings equity for KRAS company is 7.5 percent, when the expected (risk free) return on U.S. treasury bills is 3 percent, the firm's beta is 1.5 and the market return is ??

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Answer #1

Cost of Equity {Ke} = 7.5% Risk - free rate { Rf} = 3.1. Beta = 1.5 - Ke = Rp + Beta x [Rm - Rf] 7.5 = 3 + 1.5 x [ RM - 3] 7.

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