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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: rRF = 4.10%; RPM = 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%

Correct Answer:

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