Estimate the cost of equity for biogen

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Reference no: EM13953666

Biogen, a biotechnology firm, had a beta of 1.70 in 2014. It had no debt outstanding at the end of that year.

a. Estimate the cost of equity for Biogen, if the Treasury bond rate is 6.4 percent.

b. What effect will an increase in long-term bond rates to 7.5 percent have on Biogen’s cost of equity?

Reference no: EM13953666

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Estimate the cost of equity for biogen : Biogen, a biotechnology firm, had a beta of 1.70 in 2014. It had no debt outstanding at the end of that year. Estimate the cost of equity for Biogen, if the Treasury bond rate is 6.4 percent. What effect will an increase in long-term bond rates to 7...

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