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DerKrebs [107]
3 years ago
8

Steady​ Company's stock has a beta of 0.18. If the​ risk-free rate is 6.1 % and the market risk premium is 6.9 %​, what is an es

timate of Steady​ Company's cost of​ equity? g
Business
1 answer:
ahrayia [7]3 years ago
6 0

Answer:

Steady​ Company's cost of​ equity is estimated to be 7.342%

Explanation:

The cost of equity is the return that is required by the holders of common stock in the company.

<em>Cost of Equity = Return on Risk free Securities + Beta × Risk Premium</em>

                       =  6.1 % + 0.18 × 6.9 %

                       = 7.342%

Therefore, Steady​ Company's cost of​ equity is estimated to be 7.342%.

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