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Cost of equity using CAPM: Rf 6%, β 1.2, market premium 6%. Cost of equity =
A14.4%
B12.0%
C13.2%
D7.2%
Answer & Solution
Correct answer: C. 13.2%
1. Identify what the question asks: this concept maps to capmequity (§4.1).
2. Apply the framework or formula relevant to the topic.
3. Eliminate distractors and arrive at the correct option (C).
_Source: ICAI BoS CA Final Paper 2, Ch 13 "Business Valuation"_
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