You need to estimate the equity cost of capital for XYZ Corp. You have the following data available regarding past returns: 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 risk-free rate is 4%, and you expect the market's return to be 9%. 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 (d)? a. What was XYZ's average historical return? XYZ's average historical return was %. (Round to one decimal place.) b. Compute the market's and XYZ's excess returns for each year. The market's excess return for 2011 was %. (Round to the nearest integer.) The market's excess return for 2012 was %. (Round to the nearest integer.) XYZ's excess return for 2011 was XYZ's excess return for 2012 was Estimate XYZ's beta %. (Round to the nearest integer.) %. (Round to the nearest integer.) XYZ's beta is . (Round to two decimal places.) c. Estimate XYZ's historical alpha. XYZ's historical alpha was %. (Round to one decimal place.) (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Risk-free Return Year 2011 2012 3% Market Return 7% -35% XYZ Return 12% - 46% 1%