According to Value Line, Bestway Has a Beta of 1

question 50

Multiple Choice

According to Value Line, Bestway has a beta of 1.15.If 3-month Treasury bills currently yield 7.9 percent and the market risk premium is estimated to be 8.3 percent, what is Bestway's cost of equity capital?

• A)17.45%
• B)8.36%
• C)9.55%
• D)16.2%

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Definitions:

Overestimate

To assess something as more significant or larger than it actually is based on mistaken or exaggerated beliefs.

Dizygotic

Referring to twins that develop from two different eggs fertilized by two different sperm, making them genetically distinct, similar to siblings born at different times.

Identical Twins

Twins resulting from the splitting of a single fertilized egg, sharing the same genetic material and often having very similar appearances.

Fraternal Twins

Twins that develop from two different eggs fertilized by separate sperm cells, resulting in siblings that are genetically unique.