qABC Corp has a stock price of $20.The risk free rate in the market is 2%.The...
qABC Corp has a stock price of $20.The risk free rate
in the market is 2%.The Market Risk Premium over the risk free rate
for owning stocks is 4%.The beta of ABC Corp vs the market is
1.3.
Using the CAPM model calculate the cost of Equity capital for ABC
corp ?
Homework Answers
Cost of equity using the CAPM:-
=Risk free rate+beta*risk premium
=2%+1.3*4%
=7.2%
Add Answer to:
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