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Business, 05.05.2020 01:37 amandaelisantos

Butcher Timber Company hired your consulting firm to help them estimate the cost of equity. The yield on the firm's bonds is 12.00%, and your firm's economists believe that the cost of equity can be estimated using a risk premium of 3.85% over a firm's own cost of debt. What is an estimate of the firm's cost of equity from retained earnings?

a. 12.52%
b. 13.31%
c. 14.58%
d. 14.74%
e. 15.85%

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