Question: 9. Assuming the CAPM or one-factor model holds, what is the cost of equity for a firm if the firm's equity has a beta of

Assuming the CAPM or one-factor model holds, what is the cost of equity for a firm if the firm's equity has a beta of 1.2, the risk-free rate of return is 4%, the expected return on the market is 10%, and the return to the company's debt is 7%?

11.2%

11.4%

12.8%

12.9%

e. none of the above

E.	None of these.

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