Question
Booher Book Stores has a beta of 0.9. The yield on a 3-month T-bill is 5% and the yield on a 10-year T-bond is 7.5%.
Booher Book Stores has a beta of 0.9. The yield on a 3-month T-bill is 5% and the yield on a 10-year T-bond is 7.5%. The market risk premium is 6%, and the return on an average stock in the market last year was 13.5%. What is the estimated cost of common equity using the CAPM?
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Finance Applications and Theory
Authors: Marcia Cornett
4th edition
1259691411, 978-1259691416
