Oak Enterprises has a beta of 1.2, the market return is 8%, and the T-bill rate is 4%. Its tax rate is 40%. What is its expected required return of common equity?
A) Between 11% and 12%
B) Between 8% and 9%
C) Between 7% and 8%
D) Between 5% and 6%

Question

Quizplus · Accepted Answer

The Answer of Oak Enterprises has a beta of 1.2, the market return is 8%, and the T-bill rate is 4%. Its tax rate is 40%. What is its expected required return of common equity?
A) Between 11% and 12%
B) Between 8% and 9%
C) Between 7% and 8%
D) Between 5% and 6%

Oak Enterprises Has a Beta of 1