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Compute what is estimated cost of common equity using capm

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Reference no: EM132958972

Problem 1: Booher Book Stores has a beta of 1.1. The yield on a 3-month T-bill is 5% and the yield on a 10-year T-bond is 7%. The market risk premium is 7.5%, and the return on an average stock in the market last year was 15%. What is the estimated cost of common equity using the CAPM? Round your answer to two decimal places.

Reference no: EM132958972

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