2. Treasury bills are currently yielding 3.5%, the expected market return is 10%, and the firm's...

Question

Question

2. Treasury bills are currently yielding 3.5%, the expected market return is 10%, and the firms beta is 1.50. Calculate the

Answer 1

Answer #1

Cost of capital=risk free rate+beta*(market rate-risk free rate)

=3.5+1.5*(10-3.5)

which is equal to

=13.25%

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Answer 2

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