Edward Enterprises, which is debt-free and finances only with equity from retained earnings. You were given the following information: rRF = 3.50%; RPM = 4.50%; and b = 0.88. What is the firm's cost of equity from retained earnings based on the CAPM?
A. 5.90%
B. 6.80%
C. 7.46%
D. 8.41%
E. 9.20%
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