What is the firms cost of equity

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Reference no: EM131182966

The market rate of return is 10.8 percent and the risk-free rate is 4.45 percent. Galaxy Co. has 17 percent more systematic risk than the overall market and has a dividend growth rate of 5.5 percent. The firm's stock is currently selling for $39 a share and has a dividend yield of 3.8 percent. What is the firm's cost of equity?

a) 10.87

b) 9.45

c) 12.19

d) 10.59

e) 11.27

Reference no: EM131182966

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