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a.Cost of Equity i. Calculate the firm's cost of equity using the capital asset pricing model (CAPM). The formula for the CAPM is r i

a.Cost of Equity

i.Calculate the firm's cost of equity using the capital asset pricing model (CAPM). The formula for the CAPM is r_i= r_f + _i (R_Mkt - r_f).

ii.Assume the risk-free rate (r_f) is the current rate of 10-year U.S. Treasury Bonds.

iii.Calculate the market rate (R_Mkt) by calculating the market return on the Standard & Poor's 500 for the past 2 calendar years.

iv.The beta for the firm can be obtained from Yahoo! Finance.

The company is walt disney

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