Treasury Bills Currently Have a Return of 3

question 136

Multiple Choice

Treasury bills currently have a return of 3.5% and the market risk premium is 8%. If a firm has a beta of 1.6, what is its cost of equity?

• A) 8.8%
• B) 10.7%
• C) 12.8%
• D) 16.3%
• E) 18.8%

---

Definitions:

Social Responsibility

The idea that organizations are part of a larger society and are accountable to that society for their actions.

Societal Culture and Norms

The shared values, practices, and beliefs that characterize a society or social group.

Intellectual Property

Refers to creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names, and images used in commerce.

Caveat Emptor

A Latin phrase meaning "let the buyer beware," implying that the buyer assumes the risk for the quality and condition of goods purchased, especially without a warranty.