Jesse Corp.'s stock has a Beta of 1.06. The risk-free rate is 3%, and the expected...
Jesse Corp.'s stock has a Beta of 1.06. The risk-free rate is 3%, and the expected market return is 11%. The firm's cost of common equity, Re, is _____%. Round your final answer to 2 decimal places (example: enter 12.34 for 12.34%), but do not round any intermediate work in the process. Margin of error for correct responses: +/- .03.
Homework Answers
Ans 11.48%
| cost of equity = | Risk free Return + (Market Return - Risk free return)* Beta |
| cost of equity = | 3% + (11% - 3%) * 1.06 |
| cost of equity = | 11.48% |
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