Steady Company's stock has a beta of 0.18. If the risk-free rate is 6.1 % and the market risk premium is 6.9 %, what is an estimate of Steady Company's cost of equity? g

Steady Company's cost of equity is estimated to be 7.342%

Explanation:

The cost of equity is the return that is required by the holders of common stock in the company.

Cost of Equity = Return on Risk free Securities + Beta × Risk Premium

                       =  6.1 % + 0.18 × 6.9 %

                       = 7.342%

Therefore, Steady Company's cost of equity is estimated to be 7.342%.

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