medium · Principles of Finance

Calculate the cost of equity for a firm with a beta of 0.90, given that the yield on a 10-year Treasury bond is 4.2% and the average historical return on the S&P 500 is 10.2%.

  1. 9.60%
  2. 9.18%
  3. 5.40%
  4. 13.38%

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