Calculate the cost of common equity financing

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Reference no: EM131016229

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 2.27. Paul estimated that the market return is 9.78%. The current rate for 10-year Treasury Bonds is 4.85%. Calculate the cost of common equity financing using CAPM – SML formula.

Round the answers to two decimal places in percentage form.

Reference no: EM131016229

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