Haulsee inc. pays no dividend currently but is expected to start paying a small dividend next year. the 5-year-old firm has a beta of 1.25 and current earnings of $0.90 per share. the current treasury bill rate is 6.10%, and the market risk premium is 8.8%. determine haulsee's cost of equity if the firm's tax rate is 40%.

17.10%

Explanation:

The computation of the cost of equity is shown below:

In this question, we apply the Capital Asset Pricing Model (CAPM) formula which is shown below

Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)

= 6.10% + 1.25 × 8.8%

= 6.10% + 11%

= 17.10%

The  (Market rate of return - Risk-free rate of return)  is also known as market risk premium and the same is applied.

All other information which is given is not relevant. Hence, ignored it

answer: qué lástima, pero no podré ir.

explanation: the expression "qué lástima" means "what a pity" and indicates disgust, because she would like to go but she can't go.

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