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Estimate the cost of equity

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A financial analyst for the ZZZ Corporation uses the Security Market line to estimate the cost of equity, RE. The analyst observes the current risk-free interest rate, Rf, is 3%. The analyst estimates that ZZZ has a beta of 2. If the analyst finds that RE is 13%, what does the analyst use as the value of [E(RM) - Rf]?

Reference no: EM131941612

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