The farm has a dent to quit a ratio of .5 the cost of equity is...

The farm has a dent to quit a ratio of .5 the cost of equity is 22% and it's cost of the debt is 16% if the corporate tax rate is .40 what what is cost of equity be if the debt to equity ratio were

zero

Expert Solution

Cost of Equity is the return that a shareholder or investor expect from the equity investment in the business. This cost of equity is calculated by two methods one is Capital Asset Pricing Model(CAPM) and other method is dividend capitalization model.The cost of equity is also known as rate of return to shareholder.

ekkarill92 answered 1 year ago

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