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Parts A through E please. Thank you You need to estimate the equity cost of capital for XYZ Corp. You have the following data available
Parts A through E please. Thank you
You need to estimate the equity cost of capital for XYZ Corp. You have the following data available regarding past returns: a. What was XYZ's average historical return? b. Compute the market's and XYZ's excess returns for each year. Estimate XYZ's beta. c. Estimate XYZ's historical alpha. d. Suppose the current risk-free rate is 3%, and you expect the market's return to be 8%. Use the CAPM to estimate an expected return for XYZ Corp.'s stock. e. Would you base your estimate of XYZ's equity cost of capital on your answer in part (a) or in part (d)? a. What was XYZ's average historical return? XYZ 's average historical return was \%. (Round to one decimal place.) (Click on the following icon in order to copy its contents into a spreadsheet.)Step by Step Solution
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