Sonderson Corporation is undertaking a capital budgeting analysis.The firm's beta is 1.5.The rate on six-month treasury notes 5%,and the return on the ASX/S&P 200 index is 12%.What is the appropriate cost of ordinary equity in determining the firm's cost of capital?

Question

Quizplus · Accepted Answer

The Answer of Sonderson Corporation is undertaking a capital budgeting analysis.The firm's beta is 1.5.The rate on six-month treasury notes 5%,and the return on the ASX/S&P 200 index is 12%.What is the appropriate cost of ordinary equity in determining the firm's cost of capital?

Sonderson Corporation Is Undertaking a Capital Budgeting Analysis