You are a financial analyst, and your boss has asked you to determine the cost of equity
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You are a financial analyst, and your boss has asked you to determine the cost of equity (required rate of return) of Apple and Ford. Assume the Capital Asset Pricing Model (CAPM) betas for Apple and Ford are 80 and 1.40, respectively. Also assume a risk-free rate of 2 percent and expected market return of 8 percent.
Required
Estimate the cost of equity of Apple and Ford using the CAPM.
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