What is the cost of equity capital for Acme Tool

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Acme Tool is an all-equity firm (i.e. it has no debt financing) with a beta of 1.25. If the risk-free rate is 4.5% and the market risk premium is 9% (the expected return in the market is 13.5%), what is the cost of equity capital for Acme Tool.

Reference no: EM132029784

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