The market rate of return is 14.8 percent and the risk-free rate is 4.45 percent.Galaxy Co.has 54 percent more systematic risk than the overall market and has a dividend growth rate of 5.5 percent.The firm's stock is currently selling for $39 a share and has a dividend yield of 3.6 percent.What is the firm's cost of equity?
A) 14.84 percent
B) 15.31 percent
C) 15.82 percent
D) 16.28 percent
E) 20.39 percent
Correct Answer:
Verified
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