Assume the historical return for ABC Company is 11.5% and its beta is .5. Further assume...
Assume the historical return for ABC Company is 11.5% and its beta is .5. Further assume that the risk-free rate of return is 3% and the standard deviation is 30%. Based on these factors (using the Capital Asset Pricing Model) calculate the cost of equity.
A. 8.5%
B. 4.25%
C. 6.25%
D. 7.30%
I need the excel formula for this. The answer should be 4.25.
Homework Answers
![ECR) – R$ +$ * [ECRm) – Rs] ECR) = Expected Retum as Asset (ke) Rp = fisk flee Premium B = Beta q asset E(Rm) = Expected mark](http://img.homeworklib.com/questions/ce3579d0-705b-11ea-9393-b9019f537b17.png?x-oss-process=image/resize,w_560)
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