Multiple Choice
Allegheny Valley Power Company common stock has a beta of 0.80. If the current risk-free rate is 6.5% and the expected return on the stock market as a whole is 16%, determine the cost of retained earnings for the firm (using the CAPM) .
A) 14.1%
B) 7.6%
C) 6.5%
D) None of the above
Correct Answer:
Verified
Correct Answer:
Verified
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