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Using this forumula: E(Ri) = Rf + [ E(Rm) - rf] Calculate the cost of capital (e.g. the discount rate to be used) With Information

Using this forumula:

E(Ri) = Rf + [ E(Rm) - rf]

Calculate the cost of capital (e.g. the discount rate to be used)

With Information Given:
Risk free rate (Rf)	3%
Market Retun (Rm)	7%
Beta	-47.19
Debt-To-Equity Ratio	0.5

Then explaine the estimated discount rate and the limitations

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