The common stock of Yanderloft and Sons has a beta that is 25 percent larger than the overall market beta. Currently, the market risk premium is 9.2 percent while the U.S. Treasury bill is yielding 4.7 percent. What is the cost of equity for this firm?
A) 13.76 percent
B) 14.96 percent
C) 15.80 percent
D) 16.20 percent
E) 17.85 percent
Correct Answer:
Verified
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