The rate on six-month t-bills is 360 and the return on the


The Yo-Yo Corporation tries to determine the appropriate cost for retained earnings to be used in capital budgeting analysis. The firmAc€?cs beta is 1.38. The rate on six-month T-bills is 3.60%, and the return on the S&P 500 index is 7.74%. What is the appropriate cost for retained earnings in determining the firms cost of capital?

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Corporate Finance: The rate on six-month t-bills is 360 and the return on the
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