(Answered) The market rate of return is 108 percent and the risk-free

Economics

The market rate of return is 10.8 percent and the risk-free rate is 4.45 percent. Galaxy Co. has 17 percent more systematic risk than the overall market and has a dividend growth rate of 5.5 percent. The firm's stock is currently selling for $39 a share and has a dividend yield of 3.8 percent. What is the firm's cost of equity?

10.87 percent
10.59 percent
12.19 percent
11.27 percent
9.45 percent

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