The common stock of Silent Motors has a beta that is 5 percent greater than the overall market beta.Currently, the market risk premium is 8.25 percent while the U.S.Treasury bill is yielding 2.8 percent.What is the cost of equity for this firm?
A) 11.66 percent
B) 10.86 percent
C) 11.81 percent
D) 11.46 percent
E) 10.75 percent
Correct Answer:
Verified
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