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Business, 12.03.2020 22:39 shauntleaning

The Shoe Building Inc. is a 100% equity-financed company (no debt or preferred stock); hence, its WACC equals its cost of common equity. The Shoe Building Inc.’s retained earnings will be sufficient to fund its capital budget in the foreseeable future. The company has a beta of 1.50, the risk-free rate is 5.0%, and the market return is 6.5%.
What is The Shoe Building Inc.'s cost of equity?

a) 8.75% b)24.13% c) 16.25% d) 7.25%

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The Shoe Building Inc. is a 100% equity-financed company (no debt or preferred stock); hence, its WA...
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