medium · Principles of Finance risk-return-portfolio
An analyst uses a risk-free rate of 4.0% and a market risk premium of 5.5%. Stock A has a beta of 1.2 and Stock B has a beta of 0.8.
What is the difference in their costs of equity?
- 2.00%
- 2.20%
- 0.40%
- 4.00%
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