P14-2 Calculating Cost of Equity [LO1]
The Up and Coming Corporation's common stock has a beta of 0.9. If the risk-free rate is 5.5 percent and the expected return on the market is 14 percent, what is the company's cost of equity capital? (Do not round your intermediate calculations.) |
Cost of equity=risk free rate+beta*(market rate-risk free rate)
=5.5+0.9*(14-5.5)
which is equal to
=13.15%
P14-2 Calculating Cost of Equity [LO1] The Up and Coming Corporation's common stock has a beta...
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