Tidewater Fishing has a current beta of 1.21. The market risk premium is 8.9 percent and the risk-free rate of return is 3.2 percent. By how much will the cost of equity increase if the company expands its operations such that the company beta rises to 1.50?
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1.88 percent
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2.58 percent
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2.60 percent
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3.10 percent
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3.26 percent
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