Hoolahan Corporation's common stock has a beta of 1.28. Assume the risk-free rate is 5.3 percent...

Question

Question

Answer 1

Answer #1

Answer- Cost of equity=14.9%

Explanation- Cost of equity (Capital Assets Pricing Model) = Risk free rate+(Market risk premium*Beta of stock)

= 5.3% + (12.8%-5.3%)*1.28

= 5.3%+9.6%

= 14.9%

Answer 2

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