XYZ Company Ltd requires you to calculate its cost of equity based on the
Following information. Beta of XYZ Itd. is 1.2, T-Bill returns of the period is 8%,
Market return for same period is 15%. If beta of the company changes to 1.8,
what will be the changed cost of equity? Why do you feel that it has changed
in that direction? cost of retained earnings?
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