Question
You run a regression to estimate the beta of a firm's equity (stock) using the past 60 months of historical data. The regression results in
You run a regression to estimate the beta of a firm's equity (stock) using the past 60 months of historical data. The regression results in an estimated beta of 1.2. What discount rate would you use to discount cash flows to equity holders of the stock? Support your answer.
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Fundamentals Of Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
13th Edition
1265553602, 978-1265553609
