Domestic portfolio for a swiss? investor

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Problem: ?Nestlé of Switzerland Revisited.? Nestlé of Switzerland is revisiting its cost of equity analysis in 2014. As a result of extraordinary actions by the Swiss Central? Bank, the Swiss bond index yield? (10-year maturity) has dropped to a record low of 0.57?%. The Swiss equity markets have been averaging 8.30?% ?returns, while the Financial Times global equity market? returns, indexed back to Swiss? francs, is at 8.75?%. ?Nestlé's corporate treasury staff has estimated the? company's domestic beta at 0.905?, but its global beta? (against the larger global equity market? portfolio) at 0.513.

Required:

Question 1: What is? Nestlé's cost of equity based on the domestic portfolio for a Swiss? investor?

Question 2: What is? Nestlé's cost of equity based on a global portfolio for a Swiss? investor?

Reference no: EM132419768

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