D12-47. Estimating Cost of Equity Capital and Weighted Average Cost of Capital Refer to the information regarding AT&T Inc. in D12-46. In mid-2019, finance.yahoo.com reports that AT&T has a market beta of 0.76, and that its closing stock price at the end of 2018 was $28.54. Required a. Explain what AT&T's market beta of 0.76 implies regarding its stock price volatility. b. Assume that the market risk premium equals 5% and that the risk-free rate equals 2.1%. Estimate AT&T's cost of equity capital using the CAPM model. c. Footnote 12 of AT&T's 10-K reports that the market value of its debt is approximately $180.659 billion. Assume that the company's after-tax cost of debt is 3.70%. Using this information, estimate AT&T's weighted average cost of capital. LO