Question
Suppose you are trying to estimate the cost of equity for a firm as part of the calculation of the Weighted Average Cost of Capital
Suppose you are trying to estimate the cost of equity for a firm as part of the calculation of the Weighted Average Cost of Capital (WACC). If the risk-free rate is 4.8%, the expected market risk premium is 5.6%, and the beta is 1.2 for this firm's equity, what would be the expected cost of equity for this firm using CAPM? (Answer to the nearest tenth of a percent, but do not use a percent sign).
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
15th edition
1337671002, 978-1337395250
