Question: 5 points Save Answer QUESTION 5 If the firm's beta is 1.25, the risk-free rate of return is 2 percent, and the average return on

5 points Save Answer QUESTION 5 If the firm's beta is

5 points Save Answer QUESTION 5 If the firm's beta is 1.25, the risk-free rate of return is 2 percent, and the average return on the market is 16 percent, what will be the firm's cost of equity using the SML equation (CAPM approach)? A. 17.50% B. 19.50% C. 22.00% D. none of the above

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