Answered: The company has a beta of 0.85. If the…

The company has a beta of 0.85. If the risk-free rate is 3.4% and the market premium is 8.5%, what is the company's cost of equity?

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)...

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The company has a beta of 0.85. If the risk-free
rate is 3.4% and the market premium is 8.5%,
what is the company's cost of equity?

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