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Chapter 10 - The Cost of Capital Question MC #68 (Points: 10) Scanlon Inc.

1. Chapter 10 - The Cost of Capital Question MC #68
(Points: 10)
Scanlon Inc.'s CFO hired you as a consultant to help her estimate the cost of capital. You have been provided with the following data: rRF = 4.10%; RPM = 5.25%; and b = 1.15. Based on the CAPM approach, what is the cost of equity from retained earnings?

1. 7.60%

2. 8.62%

3. 10.14%

4. 12.27%

5. 12.67%

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