Question
The current yield on 10-year risk-free U.S. Treasury bonds is 3%. The market equity risk premium is 6%. If Zoom's equity beta is 0.75, then
The current yield on 10-year risk-free U.S. Treasury bonds is 3%. The market equity risk premium is 6%. If Zoom's equity beta is 0.75, then what is its equity cost of capital?
Step by Step Solution
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Step: 1
To calculate Zooms equity cost of capital using the Capital Asset Pricing Model CAPM we can use ...
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Financial management theory and practice
Authors: Eugene F. Brigham and Michael C. Ehrhardt
13th edition
1439078106, 111197375X, 9781439078105, 9781111973759, 978-1439078099
