How to calculate cost of equity

Question

The Iggy Corporation stock has a beta that is 5.00% lower than the overall market beta. The risk-free rate is 3.66% and the market rate of return is 13.09%. What is the cost of equity?

Carlos H. · Accepted Answer

CAPM:rE = rf + ß(MRP)MRP = rm- rf0.0366 + 0.95(0.1309 - 0.0366) = 12.62%

How to calculate cost of equity

1 Expert Answer

Still looking for help? Get the right answer, fast.

OR

RELATED TOPICS

RELATED QUESTIONS

Gen is interested in seeing how the money grows. Her mom suggests that she take the money in her piggy bank....

Find the equivalent rate of interest for a discount rate of 7.5% for 60 days.

how long would it take to pay off a loan of $2,900 at 11% discount when the bank charges $638?

Micheal wants his $3,200 to grow to $4,500 in 3 years. He has a saving account paying simple interest on savings.

Suppose you were given $1000 from your uncle. You deposited that money in a bank and added $70 per month..

RECOMMENDED TUTORS

IXL

Rosetta Stone

Education.com

TPT

Vocabulary.com

ABCya

SpanishDictionary.com

Inglés.com

Emmersion

How to calculate cost of equity

1 Expert Answer

Still looking for help? Get the right answer, fast.

OR

RELATED TOPICS

RELATED QUESTIONS

Gen is interested in seeing how the money grows. Her mom suggests that she take the money in her piggy bank....

Find the equivalent rate of interest for a discount rate of 7.5% for 60 days.

how long would it take to pay off a loan of $2,900 at 11% discount when the bank charges $638?

Micheal wants his $3,200 to grow to $4,500 in 3 years. He has a saving account paying simple interest on savings.

Suppose you were given $1000 from your uncle. You deposited that money in a bank and added $70 per month..

RECOMMENDED TUTORS

find an online tutor