The cost of equity for this firm is 12.56%.
Equity represents the price that could be lower back to an organization's shareholders if all of the property has been liquidated and all the organization's debts had been paid off. We also can consider fairness as a diploma of residual possession in a company or asset after subtracting all debts related to that asset. Equity is the ownership of any asset after any liabilities associated with the asset are cleared.
Computation of cost of equity:-
Beta = 1.08
The market risk premium = 7.65 %
Cost of equity = Risk-free rate + Beta * Market risk premium
= 4.3% + 1.08 * 7.65%
= 12.562% or 12.56%
Hence, the cost of equity for this firm is 12.56%.
Learn more about equity here:-https://brainly.com/question/1957305
#SPJ4
