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Your firm has a 1.2 CAPM beta. The market risk premium is currently 5%, and the risk-free rate as proxied for by the 10-year T-bond
Your firm has a 1.2 CAPM beta. The market risk premium is currently 5%, and the risk-free rate as proxied for by the 10-year T-bond is 2.60%. Your client wants you to use CAPM plus a size premium to estimate cost of equity. The firm in question has a $25 billion market cap. What is your estimate of the cost of equity? Use the chapter slides if necessary for size premium 8.6% 5.48% 10.4% 9.8% 7.6% Question 6 (1 point) I am attempting to estimate my firm's beta through the use of comps. The only matching firm I can find has an equity beta of 1.1. The debt-to-equity ratio is 18.24%, and I will assume a debt beta of 0.2. What is this comparable firm's asset beta? .961 .6793 21.15
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