Suppose the risk free rate is 2, 32%, the expected return of the market portfolio is 5, 64% and the beta of stock X-Bros S. A. is 1. 10. What is the expected cost of equity of X-Bros S. A. (in percent)?

Suppose the risk free rate is 2, 32%, the expected return of the market portfolio is 5, 64% and the beta of stock X-Bros S. A. is 1. 10. What is the expected cost of equity of X-Bros S. A. (in percent)?

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter6: Risk And Return

Section: Chapter Questions

Problem 14P: You have observed the following returns over time: Assume that the risk-free rate is 6% and the...

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Definition Definition Amount of return a company generally pays to its equity investors. The cost of equity represents the compensation required by the market in lieu of owning the asset firm and simultaneously bearing the risk of ownership.

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