Question: Assuming the CAPM or one-factor model holds, what is the cost of equity for a firm if the firm equity has a beta of 1.2,

Assuming the CAPM or one-factor model holds, what is the cost of equity for a firm if the firm 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%? A. 11.2% B. 11,4% C. 12.8% D. 12.9% E. None of these

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