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Finance: Dybvig Corporation's common stock has a beta of 1.3; what is cost of equity?

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The Dybvig Corporation's common stock has a beta of 1.3. If the risk-free rate is 4.5 percent and the expected return on the market is 12%, what is Dybgiv's cost of equity capital?

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The solution provides a brief, step by step and easy to follow response which calculates the cost of equity capital using a simple equation.

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The cost of equity capital can be found out using the CAPM

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