# Beta and Cost of Equity Capital

Calculate the beta and the cost of equity capital. The following historical data for a proxy firm is similar to the firm evaluated in the final project assignment.

Year Market Rate of Return Firm Rate of Return

20X0 25% 15%

20X1 10% 6%

20X2 15% 9%

20X3 20% 12%

Using the above data calculate the beta of the firm.

If the risk-free rate is 4%, and the market rate of return is 14%, calculate the required rate of return (cost of equity) for the stock using CAPM.

https://brainmass.com/business/capital-asset-pricing-model/beta-and-cost-of-equity-capital-209874

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calculate the beta and the cost of equity capital. The following historical data for a proxy firm is similar to the firm evaluated in the final project assignment.

Year Market Rate of Return Firm Rate of Return

20X0 25% 15%

20X1 10% 6%

20X2 15% 9%

20X3 20% 12%

Using the above data calculate the beta of the firm.

If the risk-free ...

#### Solution Summary

Calculates Beta and Cost of Equity Capital.