Cost of equity: SML. Stan is expanding his business and will sell common stock for the needed funds. If the current risk-free rate is 4.9% and the expected market return is 13.7%, what is the cost of equity for Stan if the beta of the stock is a. 0.64? b. 0.91? c. 1.02? d. 1.14? a. What is the cost of equity for Stan if the beta of the stock is 0.64?
Cost of equity: SML. Stan is expanding his business and will sell common stock for the needed funds. If the current risk-free rate is 4.9% and the expected market return is 13.7%, what is the cost of equity for Stan if the beta of the stock is a. 0.64? b. 0.91? c. 1.02? d. 1.14? a. What is the cost of equity for Stan if the beta of the stock is 0.64?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Chapter 11, Question 4
![**Cost of Equity: SML**
Stan is expanding his business and will sell common stock for the needed funds. If the current risk-free rate is 4.9% and the expected market return is 13.7%, what is the cost of equity for Stan if the beta of the stock is:
a. 0.64?
b. 0.91?
c. 1.02?
d. 1.14?
a. What is the cost of equity for Stan if the beta of the stock is 0.64?
[ ] % (Round to two decimal places.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F603d35a3-3fd0-4545-9874-8f7a9ef67273%2Fd2d5533b-fde0-4515-910a-30d0ba7c2ae5%2Fek3ci34_processed.png&w=3840&q=75)
Transcribed Image Text:**Cost of Equity: SML**
Stan is expanding his business and will sell common stock for the needed funds. If the current risk-free rate is 4.9% and the expected market return is 13.7%, what is the cost of equity for Stan if the beta of the stock is:
a. 0.64?
b. 0.91?
c. 1.02?
d. 1.14?
a. What is the cost of equity for Stan if the beta of the stock is 0.64?
[ ] % (Round to two decimal places.)
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