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Problem 39 Intro The risk-free rate is 1.5% and the required return for the market is 7%. Security Beta Stock 1 1.7 Stock 2 1.2
Problem 39
Intro
The risk-free rate is 1.5% and the required return for the market is 7%.
Security | Beta |
Stock 1 | 1.7 |
Stock 2 | 1.2 |
Stock 3 | 0.4 |
Assume that the CAPM holds.
Part 1
What is the cost of equity for stock 1?
Part 2
What is the cost of equity for stock 2?
Part 3
What is the cost of equity for stock 3?
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