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Lubov Fominskaja [6]
3 years ago
15

Ronald's Fast Food just paid their annual dividend of $1.05 a shareThe stock has a bela of 1.6. The return on the US Treasury bi

ll (risk-free rate ) is 8 percent the expected retum on the market is 15 percent What the cost of equity
Business
1 answer:
natali 33 [55]3 years ago
6 0

Answer:

19.2 %

Explanation:

Using the Capital Asset Pricing Model we can simply input the given information.

Formula

Cost of Equity = Rf + B * (Mr - Rf) where,

Rf = Risk free rate = T-Bill rate

B = Beta

Mr = Market return

so,

Cost of Equity = 8 + 1.6 * (15-8)

= 19.2 %

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garik1379 [7]

Answer:

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2 years ago
You note the following yield curve in The Wall Street Journal. According to the unbiased expectations theory, what is the one-ye
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Answer:

2.58%

Explanation:

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(1+S2)^2=(1+S1)^1*(1+2y1y)

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