If share C has a beta of 1, 3; the risk - free rate is 8% and market risk premium is 7%, what would the associated cost of equity be? a. 21.6% b. 17.1% c. 24.2% d. 10.4%

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter8: Basic Stock Valuation
Section: Chapter Questions
Problem 15MC: Assume that Temp Force has a beta coefficient of 1.2, that the risk-free rate (the yield on T-bonds)...
Question
If share C has a beta of 1, 3; the risk - free rate is 8% and market risk premium is
7%, what would the associated cost of equity be? a. 21.6% b. 17.1% c. 24.2%
d. 10.4%
Transcribed Image Text:If share C has a beta of 1, 3; the risk - free rate is 8% and market risk premium is 7%, what would the associated cost of equity be? a. 21.6% b. 17.1% c. 24.2% d. 10.4%
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