Problem:
Scanlon Inc.'s CFO hired you as a consultant to help her estimate the cost of capital. You have been provided with the following data: rRF = 5.00%; Market risk premium = 6.00%; and Beta = 0.90.
Required:
Question: Based on the CAPM approach, what is the cost of equity from retained earnings?
Note: Provide correct solution of the given problem with step by step calculations.