ABC Corporation has a beta of 1.31 and a standard deviation of 15.9 percent. The market...
ABC Corporation has a beta of 1.31 and a standard deviation of 15.9 percent. The market rate of return is 13.6 percent and the risk-free rate is 3.5 percent. What is the cost of equity for the firm?
Group of answer choices
15.55 percent
16.23 percent
14.56 percent
16.73 percent
Homework Answers
![Based on CAPM model, cost of equity can be calculated as Ry +B[E(Rm) - Rr]. We are given Rs = 3.5%, E(Rm) = 13.6% and B = 1.3](http://img.homeworklib.com/questions/eeb05f70-7a3f-11ea-b6f6-2d63af00dd76.png?x-oss-process=image/resize,w_560)
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