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NEW QUESTION: 1
Colt Inc. is planning to use retained earnings to finance anticipated capital expenditures. The beta
coefficient for Colt's stock is 1.15, the risk-free rate of interest is 8.5 percent, and the market return is
estimated at 12.4%. If a new issue of common stock was used in this model, the flotation costs would be
7 %. By using the Capital Asset Pricing Model equation C = R + B (M R), the cost of using retained
earnings to finance the capital expenditures is:
A. 13.96 percent.
B. 12.99 percent.
C. 14.26 percent.
D. 13.21 percent.
Answer: B
Explanation:
Choice "b" is correct. The capital asset pricing model (CAPM) is:

NEW QUESTION: 2

A. Option E
B. Option B
C. Option C
D. Option H
E. Option F
F. Option A
G. Option D
H. Option G
Answer: F
Explanation:
Explanation
https://technet.microsoft.com/en-us/library/ee941125(v=ws.10).aspx

NEW QUESTION: 3

A. Option D
B. Option E
C. Option C
D. Option B
E. Option A
Answer: A,B,D

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