Question
1. Assume the risk-free rate is 2% and the expected return on the market is 8%. If a company's stock has a beta of 1.75,
1. Assume the risk-free rate is 2% and the expected return on the market is 8%. If a company's stock has a beta of 1.75, what is this company's cost of equity capital?
2. If a lender charges an interest rate of 1.6% per quarter, what rate must they quote on this lending arrangement?
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The Analysis And Use Of Financial Statements
Authors: Gerald I. White, Ashwinpaul C. Sondhi, Haim D. Fried
2nd Edition
0471111864, 978-0471111863
