You have the following data: r_RF = 4.00%; RP_M = 5.00%; and b = 1.15.What is the cost of equity from retained earnings based on the CAPM approach?

Name: You have the following data: r RF = 4.00%; RP M = 5.00%; and b = 1.15.What is the cost of equity from retained earnings based on the CAPM approach?
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Question

Quizplus · Accepted Answer

The correct answer is A because the cost of equity from retained earnings based on the CAPM approach is calculated as r_E = r_RF + b(RP_M - r_RF) = 4.00% + 1.15(5.00% - 4.00%) = 9.75%.

You Have the Following Data: RRF = 4

You Have the Following Data: R_RF = 4