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Determine the market value of the equity

Question: The firm has 7,000,000 shares of common equity outstanding which currently trade on the NYSE for $43.50 per share. The beta of the stock is 1.3. The prevailing risk free rate is 4.2%, and the required return on the firm's equity is 16%.

1. What is the market value of the equity?

2. What is the Cost of Equity (assuming no float costs)?

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Finance Basics: Determine the market value of the equity

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