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The current risk-free rate of interest is 2% and the expected return on the market is 5%. The cost of equity for a stock is
The current risk-free rate of interest is 2% and the expected return on the market is 5%. The cost of equity for a stock is .0584 with a beta of 1.28.
Question: Using EXCELs Data Table feature create a two-way data table to determine the cost of equity by varying both the expected market return and the risk-free rate of interest. Use expected market return values of 8% through 14% in increments of 2% and risk-free interest rate values of 2% through 8% in increments of 2%.
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