-The Historical Returns Data for the Past Three Years for Company

Multiple Choice

-The historical returns data for the past three years for Company A's stock is -6.0%, 15%,
15% and that of the market portfolio is 10%, 10% and 16%. If the risk-free rate of return is
4%, what is the cost of equity capital (required rate of return of company A's common stock)
Using CAPM?

A) 18%
B) 14%
C) 12%
D) None of the above