Question
1) Klass Joinery Limited is looking to expand its business by reinvesting all profits into new business ventures. To enable it to determine whether it
1) Klass Joinery Limited is looking to expand its business by reinvesting all profits into new business ventures. To enable it to determine whether it earns an acceptable return on its investment, Klass Joinery Limited would like you to estimate its cost of retained earnings. Klass Joinery Limited has a beta of 1.8. If the market risk premium (MRP) is 4.2% and the risk-free rate is 4.5%, what is the firm's cost of retained earnings? (Important: Please enter your answer to the nearest 10th of a percent in decimals. For example, 10.1% would be entered as 0.101)
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