The Lenzie Corporation’s common stock has a beta of 1.90. If the risk-free rate is 5.9%...
The Lenzie Corporation’s common stock has a beta of 1.90. If the risk-free rate is 5.9% and the expected return on the market is 13%, what is the company’s cost of equity capital? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places.)
Cost of equity capital
Homework Answers
Cost of equity=risk free rate+beta*(market rate-risk free rate)
=5.9+1.9*(13-5.9)
which is equal to
=19.39%
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