Home / Questions / TerryTuna Fishery has a current beta of 11The market risk premium is 95 percent and
Terry's Tuna Fishery has a current beta of 1.1. The market risk premium is 9.5 percent and the risk-free rate of return is 3.0 percent. By how much will the cost of equity increase if the company expands its operations such that the company beta rises to 1.40? Hint, the question asks for the difference between Re with a beta of 1.4 and Re witha beta of 1.1 Select one: a. 3.10 percent b. 1.30 percent c. 2.85 percent d. 2.58 percent e. 1.88 percent
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