The Market Rate of Return Is 14

question 11

Multiple Choice

The market rate of return is 14.8 percent and the risk-free rate is 4.45 percent.Galaxy Co.has 54 percent more systematic risk than the overall market and has a dividend growth rate of 5.5 percent.The firm's stock is currently selling for $39 a share and has a dividend yield of 3.6 percent.What is the firm's cost of equity?

• A)14.84 percent
• B)15.31 percent
• C)15.82 percent
• D)16.28 percent
• E)20.39 percent