Question
After having been asked to estimate your company's cost of equity capital, you gathered the following information: YTM on five-year US Treasury note = 0.045
After having been asked to estimate your company's cost of equity capital, you gathered the following information: YTM on five-year US Treasury note = 0.045 Five-year average annual return on S&P 500 = 0.104 YTM on your company's corporate bonds = 0.069 Your company's current stock beta = 1.520 What is a good estimate you will provide? Please enter your result as a decimal, rounded to the nearest two decimal places. Do not enter dollar signs, percent signs, or commas. No credit will be given for incorrect entries. For example, if you calculated 0.1167, you should enter 0.12; or if you calculated 0.8931, you should enter 0.89.
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