Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Teh stocks is currently selling for $15.25 par share and its noncallable $1000 par value, 20 year, 7.25% conds with semiannual payment are selling for $875.00. The beta is 1.25, the yield on a six month T-bill is 3.50% on yield of 20 year TBond is 5.50%. The required return on the stock market is 11.5% by the market and has a average annual return of 14.50% during the past 5 years. The firms tax is 40%. using CAPM what is the firms cost of common stock? (13.65%, 11.73%, 11.15%, 13% or 12.32%)
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