Ask Question
31 May, 18:12

Southern home cookin' just paid its annual dividend of $0.65 a share. the stock has a market price of $13 and a beta of 1.12. the return on the u. s. treasury bill is 2.5 percent and the market risk premium is 6.8 percent. what is the cost of equity?

+3
Answers (1)
  1. 31 May, 18:22
    0
    Cost of Equity as per CAPM = rf + beta * (rm-rf)

    rf = risk free rate = 2.5%

    beta = 1.12

    rm-rf = market risk premium = 6.8%

    Cost of equity = 2.5 + 1.12*6.8 = 10.116% = 10.12%
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Southern home cookin' just paid its annual dividend of $0.65 a share. the stock has a market price of $13 and a beta of 1.12. the return on ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers