Estimate the equity cost of capital of a listed bank on Tadawul using the capital asset pricing model (CAPM) with the following information (set up the formula and show your work):

A newly issued 10-year Government Bond has an annual yield of 4% The Index for TASI was at 5000 five years ago and now is at 7095 The average yield of a 10-year Government Bond over the past 5 years is 3% The average P/E ratio for the Market over the past 5 years been 14 The Annualized Dividend Yield for the Market over the past 5 years is 3.5% Beta for the listed company is 3/4ths the Market Beta Beta of the Banking sector is 1.1