The Common Stock of Pedestrian Automotive Has a Beta of 0.89

question 27

Multiple Choice

The common stock of Pedestrian Automotive has a beta of 0.89 and a standard deviation of 15.8 percent.The market rate of return is 12.25 percent and the risk-free rate is 2.9 percent.What is the cost of equity for this firm?

• A)11.22 percent
• B)9.16 percent
• C)9.48 percent
• D)11.80 percent
• E)10.45 percent

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Definitions:

Gender-related Differences

Variations in characteristics, behaviors, or conditions that are influenced by one’s gender, often observed in psychological, biological, and social domains.

Alcohol Consumption

The act of drinking beverages containing ethanol, which can vary from moderate to heavy use and may lead to addiction and health problems.

Different Situations

Various circumstances or scenarios that may arise in life, each with its unique set of challenges, opportunities, and dynamics.

Split-brain Condition

A condition resulting from severance of the corpus callosum, leading to disconnection between the right and left hemispheres of the brain, affecting communication and coordination between them.