Estimate a Firm's Cost of Equity If Its Beta Is

question 131

Multiple Choice

Estimate a firm's cost of equity if its beta is .90, the risk-free rate is 4% and the market is currently returning 11%?

• A)13.9% ​
• B)11%​
• C)10.3%​
• D)9.9%​

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Definitions:

Indirect Tax

Tax on a thing rather than on a particular person; for example, sales tax.

Social Security Tax

A payroll tax collected to fund the Social Security program, which provides retirement, disability, and survivorship benefits to eligible Americans.

Government Role

The involvement and responsibilities assumed by a government in regulating and guiding the economy, protecting citizens, and providing public services.

Federal Tax Revenue

The income received by the federal government from taxes imposed on individuals, corporations, and other entities, used to fund public goods and services.