Diddy Corp stock has a beta of 1 2, the current risk free rate is 5 percent, and the expected return on the market is 13 5 percent What is Diddys cost of equity ...

Diddy Corp. stock has a beta of 1.2, the current risk-free rate is 5 percent, and the

Question:

Diddy Corp. stock has a beta of 1.2, the current risk-free rate is 5 percent, and the on the market is 13.5 percent. What is Diddy’s cost of equity?

Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...