A US company Aaron Athletics Companys capital structure consists of debt and common stock. The company uses the CAPM to estimate its cost of common equity. Aaron Athletics Historic Betas: 1.48 Historical Aaron Athletics Market Return (1990-2022):12.24% Historical US S&P500 Market Return (1990-2022): 10.32% Historical Financial Times Stock Exchange 100 Index (FTST 100 Index- a share index of the 100 companies listed on the London Stock Exchange) Market return (1990-2022): 9.93% The current 20-year Treasury bond is 2% The current average yield for the AAA rating corporate bonds is 5% The current average yield for the Microsoft corporate bonds is 4%

7.88%

12.24%

13.32%

15.21%

15.93%