The cost of capital for a firm with a 60/40 debt/equity split, 3.76% cost of debt, 15% cost of enuitv, and a 35% tax rate would be The risk free rate currently have a return of 2.5% and the market risk premium is 3.14%. If a firm has a beta of 1.42, what is its cost of equity? How much should you pay for a share of stock that offers a constant growth rate of 10%, requires a 16% rate of return and is exnected to sell for $45.48 one year from now