Question
Please help with this problem. Cost of Equity: CAPM Booher Book Stores has a beta of 0.8. The yield on a 3-month T-bill is 3.5%
Please help with this problem.
Cost of Equity: CAPM
Booher Book Stores has a beta of 0.8. The yield on a 3-month T-bill is 3.5% and the yield on a 10-year T-bond is 6.5%. The market risk premium is 4.5%, and the return on an average stock in the market last year was 11%. What is the estimated cost of common equity using the CAPM? Round your answer to two decimal places.
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Foundations Of Finance
Authors: Arthur J. Keown, John H. Martin, J. William Petty
10th Edition
0135160618, 978-0135160619
