Sheridan Industries common stock has a beta of 1.2. If the market risk-free rate is 5.2 percent and the expected return on the market is 8.2 percent, what is Sheridan’s cost of common stock?
I solved this problem incorrectly by doing
Kes=Rrf+(Betaesx market risk premium)
Kes=0.052+(1.2x0.082)
Kes=0.052+0.098400
Kes=0.1504=15.0%
I'm not sure what I am doing wrong. Please show full calculation.
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