Paul Sharp is CFO of Fast Rocket Inc. He tries to determine the cost of equity financing for his company. The stock has a beta of 2.21. Paul estimated that the market return is 7.88%. The current rate for 10-year Treasury Bonds is 3.27%. Calculate cost of common equity financing using CAPM – SML formula.
Paul Sharp is CFO of Fast Rocket Inc. He tries to determine the cost
of equity financing for his company. The stock has a beta of 2.21. Paul estimated that the market return is 7.88%. The current rate for 10-year Treasury Bonds is 3.27%. Calculate cost of common equity financing using CAPM – SML formula.
Round the answers to two decimal places in percentage form.
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