Scanlon Inc

question 27

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 = 4.10%;RP_M = 5.25%;and b = 0.70.Based on the CAPM approach,what is the cost of equity from retained earnings?

• A) 9.25%
• B) 7.00%
• C) 8.47%
• D) 7.08%
• E) 7.78%

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