The risk-free rate in the U.S. is currently 2% and the expected U.S. market retu

Question

The risk-free rate in the U.S. is currently 2% and the expected U.S. market return is 10%. Solso, Inc. is considering a project that has a beta of 1.2. What is the cost of dollar-denominated equity??
10.1% 11.4% none of the options listed 2.15 8.3% The risk-free rate in the U.S. is currently 2% and the expected U.S. market return is 10%. Solso, Inc. is considering a project that has a beta of 1.2. What is the cost of dollar-denominated equity??
10.1% 11.4% none of the options listed 2.15 8.3% The risk-free rate in the U.S. is currently 2% and the expected U.S. market return is 10%. Solso, Inc. is considering a project that has a beta of 1.2. What is the cost of dollar-denominated equity??
10.1% 11.4% none of the options listed 2.15 8.3%

Explanation / Answer

The cost of dollar-denominated equity = risk-free rate + beta *( market return- risk free rate)

= 2% + 1.2 (10% - 2%)

= 2% + 9.6%

= 11.6%

So, none of the options listed.

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