Illustrate the cost of equity of a firm


Problem: What is the cost of equity of a firm that has a beta of 1.98 and a dividend yield of 6.58%? Assume the risk free rate is 4.43% and the return last year of the S&P500 was 12.29%.

a. 3.04%

b. 3.23%

c. 14.69%

d. 17.22%

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Finance Basics: Illustrate the cost of equity of a firm
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