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:

Sailboats

Sailboats are vessels propelled partly or entirely by sails and are used for navigation, racing, or recreation.

Surfboards

Sporting equipment used in the sport of surfing, designed to ride waves by standing or lying on them.

Production Possibility Frontier

A curve depicting all maximum output possibilities for two goods, given a set of inputs and production technology.

Efficient Allocation

The optimal distribution of resources among competing uses to maximize output or welfare.