Red River Corporation has a beta of 1.75 and a marginal tax rate of 24%. The expected market return is 16% and the Treasury security yield (risk-free rate) is 4.5%. Calculate the firm's cost of internal equity.

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter12: The Cost Of Capital
Section: Chapter Questions
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I need this question answer general accounting

Red River Corporation has a beta of 1.75 and a marginal
tax rate of 24%. The expected market return is 16% and
the Treasury security yield (risk-free rate) is 4.5%.
Calculate the firm's cost of internal equity.
Transcribed Image Text:Red River Corporation has a beta of 1.75 and a marginal tax rate of 24%. The expected market return is 16% and the Treasury security yield (risk-free rate) is 4.5%. Calculate the firm's cost of internal equity.
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