The beta of Phillips Equipment is 1.2. Market risk premium is 7% and the risk free rate is 3%. What is the cost of equity for Phillips Equipment? Calculate using CAPM (capital asset pricing model) (round your answer to two decimal places).

The beta of Phillips Equipment is 1.2. Market risk premium is 7% and the risk free rate is 3%. What is the cost of equity for Phillips Equipment? Calculate using CAPM (capital asset pricing model) (round your answer to two decimal places).

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 7P

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Question

Q12

The beta of Phillips Equipment is 1.2. Market risk
premium is 7% and the risk free rate is 3%. What is the
cost of equity for Phillips Equipment? Calculate using
CAPM (capital asset pricing model) (round your answer
to two decimal places).

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