Question: #39 Kara Zar-El has been advised that the Build-Up Method is the most approprinte for determining a required rate of return for Steel, Inc. Currently,

#39 Kara Zar-El has been advised that the Build-Up Method is the most approprinte for determining a required rate of return for Steel, Inc. Currently, the Treasury bond rate is

2,50%, the equity risk premium is 6.75%, the correlation risk premium is 5-75%, the micro-cap risk premium is 4.50%, the earnings risk premium is 3.25%, the start-up risk

premium is 5-50%, and the seasonal risk premium is 3.75%. Using the Build-Up Method for determining the cost of capital, what is the required rate of return for Steel, Ine?

O A. 13.75%

O B. 17.00%

O C. 18.25%

O D. 19.25%

O E. 20.50%

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