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You are trying to come up with an estimate for the stock price of the Clorox Company. As part of this analysis, you plan to
You are trying to come up with an estimate for the stock price of the Clorox Company. As part of this analysis, you plan to calculate Clorox's required return on equity using the CAPM formula. Which number below should you use as the risk-free rate in that equation? Please explain
A. Clorox's debt yield to maturity
B. The 3-month U.S. Treasury yield
C. The 1-year U.S. Treasury yield
D. The 5-year U.S. Treasury yield
E. The 30-year U.S. Treasury yield
F. The risk premium on the S&P 500 of 5%
G. All of the above
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