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Paul estimated that the market return is 843 the current

Finance: Cost of equity financing

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 2.28. Paul estimated that the market return is 8.43%. The current rate for 10-year Treasury Bonds is 4.74%. Calculate cost of common equity financing using CAPM - SML formula.

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