United Kingdom's Vodafone Group needs a cost of capital estimate to evaluate an investment in Brazil's mobile phone market. Vodafone's experience investing in mobile phone infrastructure in emerging markets suggests that the systematic risk of the investment from the perspective of a U.K. investor is about the same as the average systematic risk of the emerging market. The U.K. risk-free rate is percent in pounds sterling. The world market risk premium is estimated to be percent. Calculate expected or required returns in pounds on a typical Brazilian investment based on each of the following models.

a. International CAPM: . Vodafone estimates based on a regression of Brazilian stock market returns on world market returns.

b. Global and regional market factors: , where is Brazil's systematic risk relative to Latin American regional risk that is not included in the world market return. Vodafone estimates , and percent.

c. Country credit risk model: , where CR is an adjustment for credit risk in Brazil. Vodafone estimates percent.

d. Country spread model: , where S is the 1-year Brazilian government bond yield minus the 1-year Eurocurrency yield. Currently, this sovereign yield spread is percent.

e. Modified country spread model: , where percent is the annual volatility on Brazilian stocks and percent is the annual volatility on Brazilian bonds.