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it is quite simple problem . based on the CAPM ( capital assets pricing model) model. if we put all value given in the question , we can get the risk free rate of return and market rate of return as6%,16%.
Ko= Rf+β(Rm-Rf)
Ko= cost of capital
Rf=risk free rate
β=bata
Rm= market rate of return.
So if we put the given value in the formula, equate with it, we can get the desired value which has been asked in the question to determined. as6% and16%.. Please check
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