Retained earnings in determining the firms cost of capital

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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 1.98. The rate on six-month T-bills is 2.04%, and the return on the S&P 500 index is 8.82%. What is the appropriate cost for retained earnings in determining the firm’s cost of capital?

Round the answers to two decimal places in percentage form.

Reference no: EM131020072

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Retained earnings in determining the firms cost of capital : 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 1.98. The rate on six-month T-bills is 2.04%, and the return on the S&P 500 index is 8.82%. What is the a..

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