Answer Choices

Question 1: less than, greater than

Question 2: 9.15%, 8.24%, 9.61%, 10.07%

The cost of raising capital through retained earnings is the cost of raising capital through issuing new common stock. The cost of equity using the CAPM approach The yield on a three-month T-bill is 2.74%, and the yield on a 10-year T-bond is 3.86%. the market risk premium is 5.75%. The Allen Compan beta of 0.92. Using the Capital Asset Pricing Model (CAPM) approach, Allen's cost of equity is The cost of equity using the bond yield plus risk premium approach The Taylor Company is closely held and, therefore, cannot generate reliable inputs with which to use the CAPM method for estimating a company's Based on the bond-yield-plus-risk-premium approach, Taylor's cost of internal equity is: 15.23% 18.28% 14.47% 16.75%