The risk-free rate of return is 4 and general motors has a


Your estimate of the market risk premium is 7%. The risk-free rate of return is 4% and General Motors has a beta of 1.6. What is General Motors’ cost of equity capital?

A. 15.2%

B. 14.4%

C. 16.0%

D. 13.7%

2. The ________ of a firm's debt can be used as the firm's current cost of debt.

A. current yield

B. coupon rate

C. yield to maturity

D. discount yield

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Financial Management: The risk-free rate of return is 4 and general motors has a
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