CAPM: Capital asset pricing model . This is the method used to find required rate of return , for given level of risk. Calculate the cost of retained earnings are as follows: Cost of retained earnings = Riskfree rate + ( Beta × ( Market rate − Riskfree rate ) ) Given risk free rate is 5%and expected market risk premium is 7% and beta is

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Chapter 11, Problem 6PROB

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CAPM: Capital asset pricing model. This is the method used to find required rate of return, for given level of risk.

Calculate the cost of retained earnings are as follows:

Cost of retained earnings=Riskfree rate+(Beta×(Market rate−Riskfree rate))

Given risk free rate is 5%and expected market risk premium is 7% and beta is

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