Question
Booher Book Store has a beta of 0.8. The yield on a 3-month T-bill is 4% and the yield on a 10-year government bond is
Booher Book Store has a beta of 0.8. The yield on a 3-month T-bill is 4% and the yield on a 10-year government bond is 6%. The market risk premium is 5.5% and the return on an average stock in the market last year was 15%. What is the estimated cost of common equity using the CAPM?
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Finance Applications and Theory
Authors: Marcia Cornett, Troy Adair
3rd edition
1259252221, 007786168X, 9781259252228, 978-0077861681
