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Demonstrate what estimated cost of common equity

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Problem 1: Booher Book Stores has a beta of 0.5. The yield on a 3-month T-bill is 5% and the yield on a 10-year T-bond is 8%. The market risk premium is 4.5%, and the return on an average stock in the market last year was 14%. What is the estimated cost of common equity using the CAPM?

Reference no: EM132965978

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