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