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Cost of equity: sML. Stan is copanding His business and will sell common slock toe the needed tunds. If the current risk-free rate is 3.5%
Cost of equity: sML. Stan is copanding His business and will sell common slock toe the needed tunds. If the current risk-free rate is 3.5% and the expected market retum is 9.9%, the cost of equily Sot 5 tan is a. 8.24\%, it the beta of ere stock is 0.74. b. 907% it the beta of the stock is 0.87. c. 971% is the beta of the stock is 0.97. d. 11.76% if the beta of the slockis 129 Suppose stan had io delay the swe of the common siock for wx months. When he fraty did sell the stock, the risk.tee rate had talen to 2.5%, but the expected return or the maket had risen to 10.0% What wis the efect on the cost of equity by waiting six months, wing the four ditterent betas? What do you notce about the increases in the cost of equaty as beta increases? a. What is the new cost of equity if the beta of the stock is 0.747 4. (Rosena to tivo escimal places) (Round in two decimal pisons) What is the new cost of equily if the beta dre stock is 0.977. 5. (Round to two decima places) What is the new cost of equty 1 the beta of the sock is 1.29 ? 1. (Round to teo decimal places )
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