You Have Been Hired as a Consultant by Feludi Inc

question 1

Multiple Choice

You have been hired as a consultant by Feludi Inc.'s CFO, who wants you to help her estimate the cost of capital.You have been provided with the following data: r_RF = 4.10%; RP_M = 5.25%; and b = 1.30.Based on the CAPM approach, what is the cost of common from reinvested earnings?

• A) 9.67%
• B) 9.97%
• C) 10.28%
• D) 10.60%
• E) 10.93%

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Definitions:

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