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FOR THE COMPANY AT&T (T) based on the most recent financial data available:
Capital Asset Pricing Model
Several sources list β including Telemet and Bloomberg. Find β from 3 different sources. State which source you used. Why are the betas different from different sources?
Bloomberg β = 0.681
Yahoo Finance β = 0.44
MSN Money β = 0.38
a. Find Rf. What is the risk-free rate based on?
Rf = X
State the source of Rf
You can assume that Market Risk Premium is 6.1%. Using the information above, calculate the cost of equity using the CAPM.
b. Cost of Equity =
Based on your different estimates, what do you think that the cost of equity is?
c. Cost of Equity =
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