Question: 3. O'Brien Inc. has the following data: x = 4.00%; RPM = 7.008; and b = 1.25. What is the firm's cost of equity from

3. O'Brien Inc. has the following data: x = 4.00%; RPM = 7.008; and b = 1.25. What is the firm's cost of equity from retained earnings based on the CAPM? a. 11.30 b. 11.84% c. 12.758 d. 13.20 e. 13.758 4. Assume that you are a consultant to Breaks, Inc., and you have been provided with the following data: D1 - $0.67; PO- $27.50; and g 7.00% (constant). What is the cost of equity from retained earnings based on the DCF approach? a. 8.44 b. 9.248 c. 9.448 d. 10.16% e. 10.81%

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