wolffee895
25.11.2019 •
Business
White company stock has a beta of 2 and a required return of 23%, while black company stock has a beta of 1.0 and a required return of 14%. the standard deviation of returns for white company is 10% more than the standard deviation for black company. the riskminus−free rate of return according to the capm is
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Ответ:
A company's overall cost of equity is directly related to the risk level of the firm.
Explanation:
A company's cost of equity is the compensation that financial markets require to own assets and also to take on the risk that comes with ownership. It is estimated using capital assets pricing model. It is the return firms pay to equity investors as compensation for the risk they took to invest capital. A company's overall cost of equity is directly related to the risk level of the firm.