Question
You have the following assets available to you: Asset Expected Return Riskless debt 4.0% Portfolio of small cap stocks 9.2% Portfolio of large cap stocks
You have the following assets available to you:
| Asset | Expected Return |
| Riskless debt | 4.0% |
| Portfolio of small cap stocks | 9.2% |
| Portfolio of large cap stocks | 8.2% |
| Portfolio of growth stocks | 12.9% |
| Portfolio of value stocks | 8.0% |
| S&P500 index fund | 9.3% |
What is the cost of equity for a firm with a market beta of 3.0, a SMB beta of 1.6, and a HML beta of 1.1? You may assume this firm has an alpha of zero.
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Finance And Economics Readings Selected Papers From Asia Pacific Conference On Economics And Finance 2017
Authors: Lee-Ming Tan , Evan Lau Poh Hock, Chor Foon Tang
1st Edition
9811081468,9811081476
