Compute the impact on the money multiplier of an increase in the currency-to-deposit ratio from 10 percent to 15 percent when th
e reserve requirement is 10 percent of deposits, and banks’ desired excess reserves are 3 percent of deposits.
1 answer:
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Answer:
Cost of equity will be 12.96 %
Explanation:
We have given current price of the stock = $32.45
Expected dividend in one year
Growth rate
We have to find the cost of equity
Cost of equity is given by
Cost of equity = 12.96 %