The Yo-Yo Corporation tries to determine the appropriate cost for retained earnings to be used in capital
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Question:
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 1.38. The rate on six-month T-bills is 3.60%, and the return on the S&P 500 index is 7.74%. 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.
Related Book For
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
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