CFA Level 1 Exam
Question No. 1
The common stock of Anthony Steel has a beta of 1.20. The risk-free rate is 5 percent, and the market risk
premium is 6 percent. This year's addition to retained earnings is $3,000,000. The company's capital budget is $4,000,000 and its target capital structure is 50 percent debt and 50 percent equity. What is the company's cost of equity financing?
Choose the correct option from the given list.
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