Question
Cost of Equity: CAPM Booher Book Stores has a beta of 1.2. The yield on a 3-month T-bill is 4.5% and the yield on a
Cost of Equity: CAPM
Booher Book Stores has a beta of 1.2. The yield on a 3-month T-bill is 4.5% and the yield on a 10-year T-bond is 7%. The market risk premium is 5.5%, and the return on an average stock in the market last year was 14%. What is the estimated cost of common equity using the CAPM? Round your answer to two decimal places.
_______ %
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Financial Management Principles And Applications
Authors: Arthur J. Keown
9th Edition
013033362X, 9780130333629
