Bonus Questions

You have been asked to assess the cost of equity for a Cottonile, an Egyptian

company. You can assume that Cottonile has a levered beta of $0\mathrm{.}90,$ that the US

equity risk premium Is $5\%.(6$ marks$)$

Calculate the Egyptian country's default spread. $(1\mathrm{.}5$ mark$)$

Estimate the equity market risk premium for Egypt. $(1\mathrm{.}5$ mark$)$

Calculate the risk$-$free rate in Egyptian Pound. $(1\mathrm{.}5$ mark$)$

Estimate the cost of equity for Cottonile in Egyptian Pound. $(1\mathrm{.}5$ mark$)$