The common stock of Pittsburgh Steel Products has a beta of 1.42 and a standard deviation of

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The common stock of Pittsburgh Steel Products has a beta of 1.42 and a standard deviation of 21.6 percent. The market rate of return is 12.5 percent and the risk-free rate is 5 percent. What is the cost of equity for Pittsburgh Steel Products? 
a. 15.65 percent
b. 17.75 percent
c. 18.45 percent
d. 20.50 percent
e. 22.75 percent

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
Cost Of Equity
The cost of equity is the return a company requires to decide if an investment meets capital return requirements. Firms often use it as a capital budgeting threshold for the required rate of return. A firm's cost of equity represents the...
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Contemporary Financial Management

ISBN: 9780324289114

10th Edition

Authors: James R Mcguigan, R Charles Moyer, William J Kretlow

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