Question
Amazon has a beta of 0.6. The risk-free rate is 1.6% and the expected return on the S&P500 is 6%. 1. What is Amazon's cost
Amazon has a beta of 0.6. The risk-free rate is 1.6% and the expected return on the S&P500 is 6%.
1. What is Amazon's cost of equity from retained earnings?
2. Now assume that the expected market risk premium is 6%. What is Amazon's cost of equity from retained earnings, according to the CAPM?
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Derivative Products And Pricing The Das Swaps And Financial Derivatives Library
Authors: Satyajit Das
1st Edition
0470821647, 9780470821640
