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Your Estimate of the Market Risk Premium Is 7

Question 104

Multiple Choice

Your estimate of the market risk premium is 7%. The risk-free rate of return is 4% and General Motors has a beta of 1.6. What is General Motors' cost of equity capital?


A) 15.2%
B) 14.4%
C) 16.0%
D) 13.7%

Correct Answer:

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