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The market value of TCG Limited's common stock is $20 million, and the market value of its risk-free debt is $5 million. The beta of the company's common stock is 1.25, and the market risk premium is 8 percent. If the Treasury bill rate is 5 percent, what is the company's cost of capital? (Assume no taxes.)A: 15.0 percentB: 14.6 percentC: 7.0 percentD: 13.0 percent
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