Dipanjan is right. That is the correct formula. Once you substitute you will get it.

May 15 2013 10:22 AM
Sorry the answer is not 25 %.. sir can u eloborate o this pls..

Assuming a 15% risk-free rate, cost of equity of 25% and a beta of 1, what is the excess market premium?

10% - Correct

15%

25% - Incorrect

May 29 2014 11:31 PM
Assuming a 15% risk-free rate, cost of equity of 25% and a beta of 1, what is the excess market premium?

10% - Correct

15%

25% - Incorrect