Determining the firms cost of capital

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Reference no: EM132064941

The Yo-Yo Corporation tries to determine the appropriate cost for retained earnings to be used in capital budgeting analysis. The firm's beta is 1.42.

The rate on six-month T-bills is 2.71%, and the return on the S&P 500 index is 6.30%. What is the appropriate cost for retained earnings in determining the firm's cost of capital?

Reference no: EM132064941

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