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Consider a stock of ABC Corporation whose CAPM beta is 2.5. The expected annual return on...

Consider a stock of ABC Corporation whose CAPM beta is 2.5. The expected annual return on the market is 12.25% and the annual risk-free rate is 2.5%. The annual volatility of the market is 22.55% and the annual volatility of the stock is 62.33%. Find the annual cost-of-capital for the stock and the correlation between the return on the market and the ABC Corp. stock.

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