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gulaghasi [49]
4 years ago
7

The Dybvig Corporation’s common stock has a beta of 1.5. If the risk-free rate is 4.6 percent and the expected return on the mar

ket is 12 percent, what is Dybvig’s cost of equity capital?
Business
1 answer:
Anon25 [30]4 years ago
8 0

Answer:

Dybvig’s cost of equity capital is 15.7%

Explanation:

Capital asset pricing model measure the expected return on an asset or investment. it is used to make decision for addition of specific investment in a well diversified portfolio.

Formula for CAPM

Cost of Capital = Risk free rate + beta ( market return - risk free rate )

Cost of Capital = Rf + β ( Rm - Rf )

Cost of Capital = 4.6% + 1.5 ( 12% - 4.6% )

Cost of Capital = 15.7%

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Ratling [72]

Answer:

B. the highest valued alternative that must be given up to engage in an activity.

Explanation:

Opportunity Cost is the cost of next best alternative foregone while choosing an alternative.

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A is inapt : Opportunity cost can be monetary or non monetary. Eg2 has monetary opportunity cost. But, Eg 1 has opportunity cost in terms of rice' (sacrifised) satisfaction.

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3 years ago
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2 years ago
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Answer:

Explanation:

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3 years ago
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Answer: True

Explanation:

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