Calculate the cost of equity for Apple: CAPM (Capital Asset Pricing Model) E(R) = Rf + B

Fantastic news! We've Found the answer you've been seeking!

Question:

Calculate the cost of equity for Apple:

CAPM (Capital Asset Pricing Model)

E(R) = Rf + B * [E(Rm) - Rf]

According to the US treasury (2021), the current 10-year risk free rate is 1.47

According to Finbox, Apple has a 5 yr beta of 1.21

Related Book For answer-question

Basic Econometrics

ISBN: 978-0073375779

5th edition

Authors: Damodar N. Gujrati, Dawn C. Porter

See More Books

Posted Date: Aug 24, 2023 04:26 AM

See More Questions

In general, students are expected to meet the following objectives: 1) To ascertain cost of capital for a new project by using cost of capital of existing firms operating in the same business. (2)...
During the 2015-16 period, Larry Energeria Ltd acquired a patent for heating glazing unit, as well as incurring expenses in relation to the development of a new power generation brick that it expects...
Mr Hadi was a founder of business that specializes in the healthy and wellness living industries. His business has been established in the market since mid 2000 as a privately owned company. The...
On July 1, 2021, Katrina purchased tax-exempt bonds (face value of $75,000) for $82,000. The bonds mature in five years, and the annual interest rate is 3%. a. How much interest income and/or...
You know that price ceilings are socially costly in that they create deadweight losses. But they may be costly in other ways, too. Suppose the government imposes a price ceiling of $1 per loaf on...
Mixon Companys year-end balance sheets show the following: Required: Compare the year-end short-term liquidity position of this company at the end of 2006, 2005, and 2004 by computing the: (a)...
Develop brief answers to each of the following questions: 1. What determines whether bonds are issued at a discount, premium, or face value? 2. Why does the market price of a bond vary over time? 3....
A city has adopted the following plan for compensated time off: City employees are entitled to a specied number of days each year for holidays and vacation. The number depends on length of service...
Barley Hopp, Incorporated, manufactures custom - ordered commemorative beer steins. Its standard cost information follows: Standard Quantity Standard Price ( Rate ) Standard Unit Cost Direct...
A secret service courier carrying a briefcase with the codes to the USA's nuclear defense system has a mean delivery time of 62 minutes with a standard deviation of 13 minutes. What is the...
Open job cost sheets for Jobs 5 0 , 5 1 , and 5 2 . Enter the January 1 balances on the job cost sheet for Job 5 0 . Post all costs to the job cost sheets as necessary. Predetermined overhead rate is...
Why are transfer prices based on total actual costs are not appropriate as the basis for divisional performance measurement?
Katie, your Accounting Manager, has asked you to calculate the depreciation for the new company car. The company purchased the new car on May 1, 2018. The purchase price was $22,600 and had a useful...
12. Given |a| = 8,|| = 12, and | + b| = 16, find the angle 0 = (a,b) (the angle between the vectors a and b when they are positioned tail to tail).
As a hospital administrator, you hear some complaints and want to investigate whether the problem of stereotyping exists at your facility. How will you conduct the investigation? What will you do if...
Boston Chicken, Inc. has reported earnings of $8million. It is expected that earnings will grow at 3% each year in perpetuity if the firm undertakes no new investment opportunities. There are two...
Governmental funds report current financial resources. However, governmental funds may report some assets which are current assets but which are not financial resources. Which of the assets below is...
Orange juice producers are dismayed and puzzled. An economist told them that the reason the demand for orange juice fell is that a new technology allow tomato producers to pick ripe tomatoes more...
Table 1.4 gives the foreign exchange rates for nine industrialized countries for the years 19852006. Except for the United Kingdom, the exchange rate is defined as the units of foreign currency for...
Consider the following model: Y i = Î± + Î² 0 X t + u t where Y = desired, or long-run, business expenditure for new plant and equipment, X t = sales, and t = time. Using the...
What is meant by a fixed effects model (FEM)? Since panel data have both time and space dimensions, how does FEM allow for both dimensions?
Describe the recording of transactions that begin and end at a particular point in time and the recording of continuous transactions. LO6
Describe the effect on the financial statements when an adjustment is prepared that records (a) unrecorded revenue and (b) unrecorded expense. LO11
How is the amount for an interest expense (or interest revenue) adjustment determined? LO10

Calculate the cost of equity for Apple: CAPM (Capital Asset Pricing Model) E(R) = Rf + B

Question:

Expert Answer:

To calculate the cost of equity for Apple using the C... View the full answer

Basic Econometrics

Students also viewed these accounting questions