According to CAPM Estimates,what Is the Cost of Equity for a Firm

question 102

Multiple Choice

According to CAPM estimates,what is the cost of equity for a firm with beta of 1.5 when the risk-free interest rate is 6% and the expected return on the market portfolio is 15%?

• A) 19.5%
• B) 21.0%
• C) 22.5%
• D) 24.0%

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