Answer:
22.83%
Explanation:
Cost of Equity = [tex]R_{f} + \beta(R_{m} - R_{f})[/tex]
where [tex]R_{f}[/tex] = risk free rate,
[tex]\beta[/tex] = beta of equity
[tex]R_{m}[/tex] = expected return on the market.
Therefore, Ice Co cost of equity
= 5.03% + 1.78(15.03% - 5.03%)
= 0.0503 + 1.78(0.1503-0.0503)
= 0.0503 + (1.78 * 0.1)
= 0.0503 + 0.178
= 0.2283
= 22.83%
