Sportique Inc. has a stock beta of 1.7. The 10- year Treasury bond currently yields 3.9% and analysts believe the S&P 500 should yield about 12% in the future. What is the company's cost of equity using this information? a) 4.59% b) 7.42% c) 11.04% d) 13.62% e) 17.67%

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
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Sportique Inc. has a stock beta of 1.7. The 10-
year Treasury bond currently yields 3.9% and
analysts believe the S&P 500 should yield
about 12% in the future. What is the company's
cost of equity using this information?
a) 4.59%
b) 7.42%
c) 11.04%
d) 13.62%
e) 17.67%
Transcribed Image Text:Sportique Inc. has a stock beta of 1.7. The 10- year Treasury bond currently yields 3.9% and analysts believe the S&P 500 should yield about 12% in the future. What is the company's cost of equity using this information? a) 4.59% b) 7.42% c) 11.04% d) 13.62% e) 17.67%
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