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The Cost of Equity for Pittsburgh Steel Products

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The common stock of Pittsburgh Steel Products has a beta of 1.52 and a standard deviation of 16.75 percent. The market rate of return is 9 percent and the risk-free rate is 3 percent. What is the cost of equity for Pittsburgh Steel Products?

1. 12.12 percent
2. 10.05 percent
3. 9.09 percent
4. 10.30 percent
5. 13.89 percent

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https://brainmass.com/business/issuing-equity/the-cost-of-equity-for-pittsburgh-steel-products-442736

Solution Summary

This solution is a step-by-step calculation for the following question: The common stock of Pittsburgh Steel Products has a beta of 1.52 and a standard deviation of 16.75 percent. The market rate of return is 9 percent and the risk-free rate is 3 percent. What is the cost of equity for Pittsburgh Steel Products?

$2.19