Scanlon Inc

question 29

Multiple Choice

Scanlon Inc.'s CFO hired you as a consultant to help her estimate the cost of capital.You have been provided with the following data: r_RF = 5.00%; RP_M = 6.00%; and b = 0.90.Based on the CAPM approach,what is the cost of equity from retained earnings?

• A)9.49%
• B)9.79%
• C)10.09%
• D)10.40%

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Definitions:

Organic Product

The compound formed as the result of an organic chemical reaction.

Reaction

A process in which one or more substances, the reactants, are converted to one or more different substances, the products.

Hydroboration-Oxidation

A two-step chemical reaction that converts alkenes into neutral alcohols via the addition of borane followed by oxidation.

Alkenes

Unsaturated hydrocarbons containing at least one carbon-carbon double bond, with the general formula CnH2n.