The Common Stock of Anthony Steel Has a Beta of 1.20

question 25

Multiple Choice

The common stock of Anthony Steel has a beta of 1.20. The risk-free rate is 5 percent and the market risk premium (rM - rRF) is 6 percent. What is the company's cost of common stock, rs?

• A) 7.0%
• B) 7.2%
• C) 11.0%
• D) 12.2%
• E) 12.4%

---

Definitions:

Balance Sheet

A report detailing a corporation's assets, liabilities, and equity of its shareholders at a certain moment.

Liquidity Problems

Situations where an entity faces difficulty in converting assets into cash or meeting its short-term obligations.

General Ledger

A comprehensive record of all financial transactions of a company, categorized into accounts.