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Calculating Cost of Equity: The Dybvig Corporation's common stock has a beta of 1. If the risk-free rate is 4.

Calculating Cost of Equity:
The Dybvig Corporation's common stock has a beta of 1.15. If the risk-free rate is 4.5% and the expected return on the market is 11%, what is Dybvig's cost of equity capital?

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Finance-8369306.xls

Solution:Beta = 1.15
Risk free rate = 4.5%
Expected return = 11%
Cost of equity = Risk free rate + (Beta*(Expected return-risk free rate))
Cost of equity = 4.5%+(1.15*(11%-4.5%))
Cost of equity =...

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