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Problem 38 Intro Amazon has a beta of 0.9. The risk-free rate is 3.3% and the expected return on the S&P500 is 6%. Part 1

Problem 38

Intro

Amazon has a beta of 0.9. The risk-free rate is 3.3% and the expected return on the S&P500 is 6%.

Part 1

What is Amazon's cost of equity?

Part 2

Now assume that the expected market risk premium is 6%. What is Amazon's cost of equity?

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