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An analyst estimates the cost of debt capital for Abbott Laboratories is 3.0% and that its cost of equity capital is 5.0%. Assume that ABTs
An analyst estimates the cost of debt capital for Abbott Laboratories is 3.0% and that its cost of equity capital is 5.0%. Assume that ABTs statutory tax rate is 21%, the risk-free rate is 2.1%, the market risk premium is 5%, the ABT market price is $84.10 per common share, and its dividends are $1.28 per common share.
Compute ABTs average pretax borrowing rate and its market beta. (Round your answers to one decimal place.)
Average borrowing rate =? not 3%
Market beta = ? not 0.58%
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