Suppose you estimate that stock A has a volatility of 32% and a beta of 1.42, whereas stock B has a volatility of 68% and a beta of 0.75. (a) Which stock has more total risk? (b) Which stock has more market risk? (c) Suppose the risk-free rate is 2% and you estimate the market’s expected return as 10%. Which firm has a higher cost of equity capital

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