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Smathers Corp. stock has a beta of 1.13. The market risk premium is 8.00 percent and the risk-free rate is 3.30 percent annually. What is the company's cost of equity

Sagot :

Tundexi

The company's cost of equity is 12.34%.

Given Information

Beta of 1.13, market risk premium of 8.00%, risk-free rate is 3.30

Cost of equity = Risk free rate + (Beta*market risk premium)

Cost of equity = 3.3 + (1.13*8)

Cost of equity = 3.3 + 9.04

Cost of equity = 12.34%

In conclusion, the company's cost of equity is 12.34%.

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