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    Finance Applications and Theory Study Set 3
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    Exam 11: Calculating the Cost of Capital
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    FlavR Co Stock Has a Beta of 2
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FlavR Co Stock Has a Beta of 2

Question 25

Question 25

Multiple Choice

FlavR Co. stock has a beta of 2.0, the current risk-free rate is 2, and the expected return on the market is 9 percent. What is FlavR Co's cost of equity?


A) 11 percent
B) 13 percent
C) 16 percent
D) 20 percent

Correct Answer:

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