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Question

Paul Sharp is CFO of Fast Rocket Inc. He tries to determine the cost

of equity financing for his company. The stock has a beta of 1.52. Paul estimated that the market return is 9.30%. The current rate for 10-year Treasury Bonds is 2.94%. Calculate cost of common equity financing using CAPM - SML formula.

Step-by-step answer

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Subject: Business, Finance

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