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Estimate the firm-specific expected return

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Reference no: EM132951023

Problem 1: Assume the risk-free rate is 2%, beta is 2.00, and the market risk premium (MRP) is 7%. Estimate the firm-specific expected return (cost of equity capital) using the capital asset pricing model (CAPM).

A- 16%
B- 14%
C- 18%
D- 20%

Reference no: EM132951023

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