Beau Markets Has a Beta of 1

question 29

Multiple Choice

Beau Markets has a beta of 1.12,a cost of debt of 8.6 percent,and a debt-to-value ratio of .6.The current risk-free rate is 3.22 percent and the market rate of return is 14.47 percent.What is the company's cost of equity capital?

• A)12.97 percent
• B)10.95 percent
• C)15.82 percent
• D)11.49 percent
• E)13.96 percent

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