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The risk free rate currently have a return of 2.5% and the market risk premium is 7.83%. If a firm has a beta of 1.42, what is its cost of equity
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29 votes
29 votes
The risk free rate currently have a return of 2.5% and the market risk premium is 7.83%. If a firm has a beta of 1.42, what is its cost of equity

User Miholzi
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1 Answer

9 votes
9 votes

Answer:

13.62 %

Step-by-step explanation:

Cost of Equity = 2.5% + 7.83% x 1.42 = 13.62 %

User ToughMind
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