Indicate the cost of equity capital, based on capital asset pricing model, with the following information:
Beta coefficient - $1.40$
Risk-free rate of interest - $9$ %
Expected Rate of Return on equity in the market - $16$ %.

9.8

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18

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18.8

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16

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Solution

The correct option is C $18.8$ %
Cost of equity capital, based on $C A P M =$
Risk free return + (expected rate of return - risk free return) $\times β$

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Indicate the cost of equity capital, based on capital asset pricing model, with the following information:Beta coefficient - 1.40Risk-free rate of interest - 9%Expected Rate of Return on equity in the market - 16%.

The correct option is C 18.8%Cost of equity capital, based on CAPM= Risk free return + (expected rate of return - risk free return)×β

Indicate the cost of equity capital, based on capital asset pricing model, with the following information:
Beta coefficient - $1.40$
Risk-free rate of interest - $9$ %
Expected Rate of Return on equity in the market - $16$ %.

The correct option is C $18.8$ %
Cost of equity capital, based on $C A P M =$
Risk free return + (expected rate of return - risk free return) $\times β$