You need to estimate the equity cost of capital for XYZ Corp. You have the following data available regarding past retums a. What was XYZ s average historical return? b. Compute the markets and XYZ's Excess returns for each year Estimate XYZ's beta c. Estimate XYZ's historical alpha. d. Suppose the current lik-free rate is 3%, and you expect the market's return to be 7% Use the CAPM to estimate an expected return for XYZ Corp's stock e. Would you base your estimate of XYZ's equity cost of capital on your answer in part (a) or in part Id)? a. What was XYZ s average historical return? XYZ's average historical return was % (Round to one decimal place) b. Compute the markers and XYZ'S Excess returns for each year The markets excess return for 2011 was % (Round to the nearest Integer) The markers excess return for 2012 was (Road to the nearest Integer) Data Table XYZs excess return for 2011 was % (Round to the nearest Integer) XYZs excess return for 2012 was % (Round to the nearest integer) (Click on the con located on the top-right comer of the data table below in orde Estimate XYZ's beta is contents a peedasheet) Market Return XYZs beta is Risk free Return (Round to two decimal places.) XYZ Return c. Estimate XYZ historical alpha XYZ historical alpha was %. Round to one decimal place) d. Suppose the current risk-free rate is 3%, and you expect the markets return to be 7%. Use the CAPM to estima The expected return for XYZ Corp.'s stock was % (Round to two decimal places.) e. Would you base your estimate of XYZ sequity cost of capital on your answer in part(a) or in part (d? (Select the best choice below) O A Part (a) because the CAPM provides a better estimate of expected returns OB. Part (d) because the average past returns provides a better estimate of expected returns OC. Part (d) because the CAPM provides a better estimate of expected returns OD. Part(a) because the average past returns provides a better estimate of expected retums